The former owners stripped of their properties by the communist regime, who were lucky enough to get shares in Fondul Proprietatea, were resigned to the shares’ stock exchange price, considering that shares are now traded at the same price as in September 2010, when Franklin Templeton took over the management of the fund, back when the shares were not even listed.
But they asked in the General Meeting for the manager to try to pay the dividends due from last year’s profit faster. The review general meeting takes place once a year, in April, and on the agenda are the financial statements for the previous year and the proposal on the payment of dividends.
One angry shareholder accused the fund manager of deliberately postponing the payment of dividends in order to keep the money in their account for longer.
“You have enough time to finalize financial statements until March, and in April to pay us the dividends, and some of them delay the payment of dividends until September or October, which does not happen on developed markets, where companies pay dividends on a quarterly basis, even in the course of the fiscal year.
The stake for the dividends of Fondul Proprietatea is very large, considering that the gross amount that the fund will pay this year amounts to EUR120 million. Only Petrom pays higher dividends (EUR400 million).
It is important for the 10,000 shareholders of Fondul Proprietatea to get their money as soon as possible because each day of delay means smaller earnings. For instance, whoever holds 2 million Fondul Proprietatea shares has a right to gross dividends of RON77,000 and will collect almost RON64,800 in net amount (around EUR14,800). This amount, if placed in a bank at an interest rate of 7% a year, returns an interest rate of EUR170 in two months.
For an institutional shareholder, which owns 200 million shares, the two months’ delay in paying dividends means losses of EUR17,000.
Greg Konieczny, manager of Fondul Proprietatea, says the current regulations doesn’t allow the faster payment of dividends, which has to first be approved in the General Meeting, and then the law provides for a period of a few weeks until the registration day, when the shareholders entitled to dividends are identified. He says in the future he will try to accelerate the process of dividend payment.
(English version by Daniela Stoican)