On September 10, TRG noted with surprise the decision issued by the National Agency for Fiscal Administration (ANAF) to levy a distraint upon some of RRC lands, facilities and shares in the subsidiaries.
The distraint bans the alienation of the company’s assets. Rompetrol does not intend to alienate these assets: from 2007 through 2010, TRG investment program stands at over 1 billion USD, based on the funding granted by the major shareholder KazMunayGas of $ 1,8 billion during the same period. The action taken by ANAF does not affect RRC, but it creates a significant image loss for RRC and The Rompetrol Group.
This decision ignores the legal and contractual provisions whose terms are very clear, being the most recent in a series of actions taken by public authorities on the subject of bonds issued by RRC. Through this decision, assets are declared inalienable for an amount of money that RRC does not and will never owe the state budget, contrary to what ANAF pretends.
RRC issued bonds that were purchased by the Romanian state on account of debts and interest accrued by the company before privatization. According to O.U.G. 118/2003 and Convention Issue, the remaining bonds are convertible into shares as of September 30, 2010. This transaction was approved by Parliament - Law 89/2005, validated by the Competition Council and promulgated by the President of Romania.
Moreover, the Ministry of Finance, through the voice of Minister Sebastian Vladescu, admitted on June 29, 2010 that "If [the major shareholder] KazMunaiGaz will pay 100 million dollars, the state will take over 40% of the shares of Rompetrol and the Kazakhs will have the majority. According to the law, what is not paid shall be converted into shares. I disagree, but the law says so. I did not levy that law. "
RRC complied with the provisions of the above mentioned Convention and with the normative act, and convened an extraordinary general meeting of shareholders to approve the conversion of all remaining bonds into shares. Also, RRC has delivered to the Ministry of Finance all relevant information about the conversion of bonds into shares.
The payments made by RRC to the Ministry of Finance under the Convention, will reach over 310 million dollars, as of September 30. It’s worth mentioning that almost 40% of the total bonds is made up of interest and penalties accrued in 2003, thus the company has paid for 7 years interest on interest.
Therefore, the ANAF action (exercised for an overdue commercial debt and for which the Ministry of Finance will certainly receive shares, as it was approved by a law passed by the Parliament of Romania) is a measure outside the legal powers conferred to ANAF, unjustified and abusive, contrary to the principles of transparency and good faith, and contrary to the obligations internationally assumed by the Romanian state to ensure a fair and equitable treatment of foreign investments in Romania.
RRC, together with its subsidiaries, bear the social responsibility for over 4,000 employees and constantly evaluate and monitor that all measures respect the legal, commercial, operational norms in order to not expose the company to the risks created by the current economic context. TRG does not understand and is concerned that the excesses of the authorities face in the violation of the applicable legal framework in Romania.
Reaching a climax with the decision of distraint, the actions taken against Rompetrol by some public authorities now appear to be concerted and deliberate. To the extent that the Ministry of Finance will continue to demonstrate a lack of any real interest to reach an agreement through dialogue, TRG will be in the position to address international forums for abusive actions which tend to the expropriation of investments in Romania, including the International Arbitration Court in Washington ("ICSID").