Fondul Proprietatea warns of corporate governance weakening in Nuclearelectrica

Fondul Proprietatea accuses weakening of corporate governance in Nuclearelectrica, regarding the two new points proposed by the Ministry of Energy in the convening notice of Nuclearelectrica’s General Shareholders Meeting scheduled for August 24.

Fondul Proprietatea says that Nuclearelectrica’s interim supervisory board is to be changed with another four-month board, despite the fact that the expiration of the current board members mandate was known to all shareholders for months now. Moreover, it adds that under the new mandate contracts, Board members are no longer held accountable for non-competition obligations, permitting flagrant conflicts of interest.

In the Fund’s view, this clearly increases the risk of potential corrupt and abusive practices at Nuclearelectrica. Moreover, it endangers the company’s performance, as it may impact the share value of this listed company and the investors’ confidence in its future due to the lack of accountability and transparency.

Johan Meyer, co-CEO and co–portfolio manager of Fondul Proprietatea, said: “Following the similar situation at Hidroelectrica, making detrimental changes to the board mandate contracts seems to be a common practice of the Ministry of Energy. This situation raises serious concerns about the energy sector board members’ accountability to act in the best interest of the company and not use their board positions in companies like Nuclearelectrica and Hidroelectrica to serve other interests than those of the companies.”

Launched in December 2005, Fondul Proprietatea was established to compensate Romanians whose properties were confiscated by the former communist government.