RO Govt. squeezes SOE “so that they don’t waste the money”
The companies would have anyway wasted the money for top management bonuses, tourism or team building sessions, Romanian prime minister Florin Citu explained the logic of squeezing most of the profit generated by the state-controlled companies - a practice his Liberal Party (PNL) had previously criticised at their Social Democrat predecessors as detrimental to companies’ investment capacity.
The striking statement surfaced that the Government wants over 90% of the dividends at Transelectrica and Transgaz. It issued a memorandum mandating all its representatives in state-controlled companies to enforce such payout ratios, Profit.ro reported.
Transgaz on May 30 and Transelectrica on May 31 informed the shareholders in notes to investors about Government’s representatives being instructed to require such high dividend payout ratios.
Transgaz’s profit dropped by 34% yoy to RON 230 mln (EUR 46 mln) in 2020, while Transelectrica’s profit increased by 18% yoy to RON 96 mln (EUR 20 mln).
In May, the Government’s representatives backed by Fondul Proprietatea also decided to take out not only last year’s profit but also the reserves of Hidroelectrica, a company that announced an ambitious five-year investment plan and contracted the biggest “green loan” from a local bank to finance it.
As a result of the shareholders’ decision, Fondul Proprietatea will receive RON 250 mln (EUR 42 mln) in ordinary dividends and another RON 200 mln (EUR 40 mln) in supplementary dividends. Meanwhile, the Romanian state will get just over RON 1 bln (EUR 206 mln), plus RON 800 mln (EUR 160 mln).
The Liberals, then in opposition, have repeatedly criticised such practices aimed at financing the public budget. In the past, the Social Democrats used to set the payout ratio under Government decisions.
(Photo source: Gov.ro)