Oltchim privatization triggers sharp political disputes

The privatization of Oltchim plant remains undefined as the potential buyer, the controversial business man and television owner Dan Diaconescu, refused to sign the agreement with the state on the grounds that the document is incomplete.

The actual signing of the document seems to be postponed even more as, according to his lawyer, Diaconescu boarded a plane to München.

Dan Diaconescu will return on Wednesday morning when discussions about closing the agreement will be continued, informs Mediafax on the basis of the lawyers’ statement.
Victor Ponta showed signs of dissatisfaction regarding Diaconescu’s reasons for not signing the agreement, saying there are traces of a political deal between Dan Diaconescu and the former representatives of the Democratic Liberal Party (PDL), which was made in order to hide their errors.

“As you can see, we have to deal with all that has been stolen and damaged by the Democratic Liberal Party: the biggest theft of all being the fact that the plant only had contact with companies owned by the PDL, therefore hundreds of million Euros from the public sector being stolen by the most corrupt of all, mister Videanu.

In reply, PDL’s interim president Adriean Videanu says “ it is the government fault that the privatization of Oltchim plant was unsuccessful.

The auctioneers are not to be blamed but the masquerade made by the Government of Romania”, said Andriean Videanu.

Privatization fail “leads to judicial reorganization”

Leaving reproaches aside, the plant remains in a difficult situation and the privatization postponement only brings new debts to state budget.

The former Minister of Privatization, Valentin Ionescu, says that the privatization procedure cannot raise legal issues.

“The privatization procedure of Oltchim has been transparent enough and well organized, so I do not believe that legal issues could be brought up by anyone.

Restarting production at Oltchim depends on the working capital and on the management. There are several factors which determine restarting the business, aside from the privatization agreement. Therefore we will know it after the privatization, although the activity there can begin at any time in the same conditions even if the agreement is not signed, and it is very probable this will happen”, said Valentin Ionescu for Radio Romania Actualitati.

He says that if the contract is not signed, the company will begin a reorganization program.
‘If the contract is not signed- and we have all proof this will happen, then the company needs to begin a judicial reorganization or concordat procedure, which means restructuring the company. It is a step that needs to be done, by the debtor or by the shareholder.’

One of the conditions imposed by the IMF includes the privatization of Oltchim, the last deadline being 21st of September.

IMF did not say however that this should be done no matter the factors, adds Valentin Ionescu.

‘The Monetary Fund imposed that Romania should privatize Oltchim, but not under any kind of circumstances. Romania had all the necessary time and this year only had at least six months to think this over, let alone the fourteen years during which no measure of restructuration or privatization was taken. IMF wants this company to cut off losses.
‘What is going to happen from now on is the government’s business. Anyway no other debt to the state budget should come up, so if the company is not bought in the near future, which is very likely to happen, then the company should take all the given steps towards judicial reorganization.

The premier said however that the government proved to be politically willing and that IMF will support the privatization of Oltchim.

The meeting with IMF is planned for Friday.

Translated by Angelica Tapoca
MTTLC, Bucharest University