As a result of the conflict, both regional investment fund SIF Oltenia and Catalin Chelu have dozens of lawsuits pending.
At stake is control over vegetable oil producer Argus Constanta (UARG.RO), whose capitalization currently stands at EUR33.6 million, and over Comcereal Tulcea (CTUL.RO) that Argus owns.
The latest developments happened at the end of last week when Argus had the general meeting of shareholders scheduled to elect the board of directors.
On Friday, when the meeting was held, only Chelu’s group of shareholders attended. The group owns 43% in the company and elected a board of directors made up only of people who are close to the businessman, even though they were only allowed to use voting rights for 33% instead of 43%. The remaining 10% had the voting rights suspended because the stock was acquired without conducting a mandatory tender offer.
SIF Oltenia announced on Friday that its representatives had not been allowed to enter the building where the general shareholder meeting was held and that they had called the police to see it. Under the circumstances, SIF Oltenia management says the meeting whereby Chelu got control over the board of directors is illegal.
“This is definitely an emergency because Argus is run by people who do not comply with all the legal requirements. Gabriel Constantin, who was chosen as chief executive officer, has a tax offence record and was not confirmed for his position by the Constanta Trade Registry Office,” said Tudor Ciurezu, chairman of SIF Oltenia. “CNVM supervision is necessary until a general shareholders meeting is held to confirm what shareholders really want.”
He added Argus was at an impasse for the time being, as banks would no longer lend any money to it because of the shareholder fighting, and he had notified CNVM and filed criminal complaints against those who did not allow the shareholders to enter the company.
On the other hand, Chelu ironically commented, “I heard they stood there by the official entrance for half an hour or an hour. If I were them I would not have waited for the red carpet, I would have climbed over the fence, I would have done something. Could they not have used some other way in, some hole in the fence or another gate? There was one 50 or 80 meters away. They could have called me on my cell phone but they didn’t.”
He is unhappy that the Bucharest Stock Exchange officials did not publish the report with the decisions made by shareholders, saying he would sue the stock market operator management over this.
Chelu got into a conflict with SIF Oltenia after paying over EUR10 million to buy 43% in Argus, via several companies and individuals, and the National Securities Commission decided they were acting in concert and had to carry out a tender offer. Until that happens, the group of shareholders only has voting rights for 33% of the stock.
Argus’ board of directors last week sent to the securities market watchdog and the Central Depositary the list of the shareholders whose voting rights had been suspended, which included only Chelu’s group. The meeting of the board was held with only two members of the five (both of them SIF Oltenia representatives), after the other three resigned.
Chelu demands an explanation from SIF Oltenia as to why such a decision was made with only two members three days before the general meeting of shareholders, as a board with only two members representing SIF Oltenia was no longer representing all shareholders.
In turn, SIF Oltenia’s chairman Tudor Ciurezu says that the only thing the two members of the board did was submit the lists of shareholders acting in concert to the National Securities Commission, as required by the law.
Chelu, however, believes that several shareholders have teamed up against him to seize control of Argus and is unhappy the Commission has not yet ruled that such a group of shareholders acted in concert.
“There aren’t that many Argus shareholders left now, just group one and group two, that is the SIF Oltenia, Business Capital for Romania-Opportunity fund, SIF Banat Crisana and Tudor Ciurezu group and my group of companies. Let’s see what comes out of this considering the DNA and CNVM have to do something,” Chelu says.
SIF Oltenia owns 32% in Argus, and Business Capital for Romania-Opportunity fund, controlled by BCR and a company where businessman Florin Pogonaru is a shareholder, has recently bought 6.3%.
(English version by Loredana Fratila-Cristescu; Editing by Radu Bostan)