December 21, 2017 / 1:01 PM / 6 months ago

Romania's Fondul, foreign investors slam corporate governance changes

Dec 21 (Reuters) - Romania’s investment fund Fondul Proprietatea, managed by Franklin Templeton

* Criticises law passed by parliament’s lower house that exempts dozens of state-owned companies from meeting corporate governance rules.

* Urges Romanian president to send the bill back to parliament for re-examination.

* Says the changes are a huge step back in time for state firms, as risks to their integrity via corruption rise.

* Fondul is a minority shareholder in a slew of state-owned firms, mainly in transport and energy sectors.

* “Fondul Proprietatea believes that exempting state-owned enterprises from corporate governance legislation poses a direct threat to their financial health, opening the door to political cronies’ appointments serving other interests than the well-being and development of these companies,” it said in a statement.

* Romania’s Foreign Investors Council (FIC), which groups some of the country’s largest private investors, said in a statement it had noticed a significant increase in distrust in public institutions as a result of numerous legal changes that affected the economy and the rule of law.

* Among those changes, FIC listed the corporate governance exemptions, increased political interference in regulatory agencies which should be independent, as well as a controversial judicial overhaul.

* FIC also warned Romania will not fulfil the criteria for joining the Organisation of Economic Cooperation and Development (OECD) without corporate governance rules for state firms. (Reporting by Luiza Ilie)

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