As publicly listed companies, they would have to comply with strict corporate governance and transparency rules, strict periodical financial reporting and the small shareholders would put pressure on the management to uphold the law. At the same time, they would also become more efficient, the government would collect more taxes and management breaking the law could be avoided.
“All state-run companies should go public. Privatization of state-owned companies should only be done via the stock market because listing helps quite a lot in collecting taxes, small shareholders will be the first to make sure the management does not break the law and the company will pay taxes,” Dan Paul, who is also vice-president of the Bucharest Stock Exchange said on ZF Live.
Seven of the 20 largest state-run companies are listed on the Bucharest Stock Exchange, and the most important of them are Romgaz (SNG.RO) and Electrica (EL.RO), which have to follow strict rules about financial reporting and transparency. Listed companies have stable dividend payment policies to attract investors to finance them.
Electricity distribution group Electrica, which supplies power to Transylvania and northern Muntenia officially became a listed company on July 4, 2014 and now has a board of directors that includes European Bank for Reconstruction and Development (EBRD) officials and stock market investors as members.
The government has 27 companies among the largest 300 companies in Romania or less than 10% of the total.
“The next to go public on the Bucharest Stock Exchange are Complexul Energetic Oltenia (Oltenia Energy Complex i.e.), Hidroelectrica and the Constanta Harbor – where the mayor tried to change the shareholder structure, which delayed its floatation,” Dan Paul said.
(English version by Loredana Fratila-Cristescu)