The Romanian head of state claims that the fund should have been established by a decision of the country’s central administration and not by the legislative body, as FSDI will engage in commercial activities as a joint stock company and will be considered a juridical entity.
Iohannis also criticized the bill for not including any type of monitoring of the FSDI by other authorities, and for being unclear in regards to setting up a Supervisory Board for the fund.
“The criticized law is unclear also under the aspect of lacking any mentions referring to FSDI monitoring by any other authority, including Eurostat, during its existence. Furthermore, in outlining the FSDI’s legal regime there are no references to applicable and mandatory European regulations regarding the activity of such a fund,” reads the official challenged made by President Iohannis.
The president challenged seven points of the bill as being unconstitutional, among them considering that the transfer of assets from private state management to a joint stock company by law violates both the principle of separation of powers and Constitutional Court decisions. The latter decided in a 2014 decision that such assets are to be exclusively managed by the Romanian Government.
Romania’s Parliament passed on June 7 a bill setting up the Sovereign Development and Investment Fund with a share capital of RON9 billion.
The fund’s portfolio includes controlling or minority stakes in 33 state companies in the pharmaceutical, transport and energy fields, such as electricity provider Electrica, natural gas provider Romgaz SA and pharmaceutical company Unifarm SA.
“FSDI will aim at developing and funding profitable and sustainable investment, being a funding mechanism which will identify and materialize investment opportunities with impact on durable economic development and long –term job creation. At the same time, the Sovereign Development and Investment Fund will contribute both to Romania’s efforts to get the emergent market status for the domestic capital market by increasing liquidity on the Bucharest Stock Exchange, as well as to the increase of the absorption level of non-refundable European funds by ensuring the co-funding financial sources of the investment projects,” according to the Government.