Major RO company spots possible frauds at subsidiary sold recently to foreign investor

Romanian construction materials producer TeraPlast has informed its investors that, during an internal review, the company spotted possible illegal actions within its subsidiary TeraSteel Romania.

TeraPlast is in the process of selling TeraSteel to Irish group Kingspan along with another subsidiary (Wetterbest).

In an extraordinary shareholders meeting on August 31, the group's shareholders have approved the sale of the two subsidiaries for a headline price of RON 410 million (EUR 85 mln), which will be adjusted for the working capital, cash, indebtedness, and some shares that can not be part of the deal.

Following the suspicions mentioned by the company in its August 28 press release, all necessary measures were undertaken to ensure the cessation of the fraudulent activity and the recovery of all potential damages incurred by TeraSteel.

The labor contracts of two employees were terminated, and TeraSteel filed a criminal complaint and will use all procedural means available to recover all damages, TeraPlast's press release reads.

"This event will not alter the parameters of the recently announced transaction," the company's management assured.

(Photo: TeraSteel SA Facebook Page)