Romanian utility Electrica sues former managers for EUR 50 mln damages

Romanian utility group Electrica has asked for the approval of its shareholders to go to court against former directors and administrators for recovering EUR 60 million in damages (out of which EUR 10 mln interest) established as a result of the Court of Auditors' controls.

The largest part of the damages (some EUR 47 mln) accounts for equipment and works paid for, but not physically found among company’s assets. The equipment was needed for the activity of Electrica’s subsidiaries, which are separately incorporated.

Separately, the group’s board of directors has asked the shareholders to approve supplementary benefits -- most of them refused by the shareholders in the past. Namely, they asked for removing the limitation on the number of meetings attended by a board member during a year (which are paid separately, in addition to the monthly wage). They asked for severance packages (loyalty bonuses) in amount to 12 monthly wages, namely a total of EUR 43,500 per year.

It is unclear, however, what these loyalty bonuses mean -- namely where former Electrica managing board members are banned for hiring.

Currently, one of the members is also on the board of Transelectrica, which calls into question the very concept of loyalty bonus.

The Romanian state holds a 49% stake in Electrica and controls the majority stake in Transelectrica.

(Photo: Pixabay)