Radio România Internațional

Tag: bankruptcy

  • Scandal in the insurance sector

    Scandal in the insurance sector

    City Insurance, Romania’s leading issuer of civil liability insurance for
    car owners, went under the special administration of the Insurance Guarantee
    Fund in early June, and has failed to submit in due time the amount stipulated
    in the relevant minimum capital requirements. ASF has announced that without this amount, of over 150 million
    euro, the company, which has issued some 3 million car insurance policies, can no longer
    continue to operate in Romania. Dan Apostol, spokesman for the Financial Supervising Authority:




    Dan Apostol: The authority ordered the
    company to submit, by the deadline stipulated by law, a short-term financing
    plan-in other words, to prove it has the money to cover the minimum capital
    requirement. Then they were supposed to come up with a recovery plan to prove
    they meet the solvency capital requirement. Also, to ensure a prudential
    management of this company, the Financial Supervising Authority appointed the
    Insurance Guarantee Fund as a temporary administrator.




    The
    investigation into the company’s bankruptcy points to possible frauds and
    operations conducted in tax haven countries, says the head of the Insurance
    Division of the Financial Supervising Authority. According to Valentin Ionescu, City Insurance
    declared fictitious amounts in its accounts, and the reinsurance was conducted
    via offshore accounts difficult to verify:




    Valentin Ionescu: This company placed
    outwards reinsurance on 90% of its contracts, going to tax havens. We
    investigated with the authority in the Cayman and Barbados, the answers took a
    year to reach us, and we found there are also problems with respect to the
    insurance of this company.


    The Financial Supervising Authority cancelled City Insurance’s license,
    declared the company insolvent and initiated the bankruptcy procedure.




    At
    present, there are tens of thousands of cases involving damaged cars with City
    Insurance policies, and the claims will be taken over by the Insurance
    Guarantee Fund, which will cover the damages.




    Meanwhile,the government is
    working on 2 emergency orders on the insurance sector, which are currently
    pending approval by the Competition Council, PM Florin Cîţu announced. One of
    the orders concerns policy prices, and the other one provides for some form of
    protection for the clients of City Insurance, if necessary. The latter is aimed
    at stepping up the payment of claims for policy owners.




    Under the current legislation, car owners have to wait
    months and even years for the court to rule the company bankrupt, as it was the
    case with 2 other companies, Carpatica and Astra, which left the insurance
    market several years ago. (tr. A.M.
    Popescu)

  • Heating problems in Bucharest ahead of winter season

    Heating problems in Bucharest ahead of winter season

    Recent rumours regarding the impending bankruptcy of the public utility company RADET have been confirmed this week by a final ruling of the Bucharest Court of Appeals. The judges dismissed the appeals and upheld the decision made in April this year by the Bucharest Court, which had rejected the companys reorganisation plans and declared it bankrupt instead.



    Without any significant investments for the past 50-60 years, Bucharests public heating system has shown ever more frequent signs of failure, and the temporary suspension of hot water and heating supply in order to fix breakdowns has turned into a regular practice.



    As Bucharests Mayor General Gabriela Firea explained before the Court hearing, a prospective windup of RADET is not to mean that the heating supply system will be dismantled. Instead, the utility will be taken over by the Termoenergetica Municipal Company.



    One of the causes of RADETs huge debts is the accrual of penalties, which is not related to how the company has been managed, but rather to an unfavourable contract between RADET and ELCEN, on the one hand, and to the actual state of the infrastructure, the Mayor also explained. ELCEN, a state-owned company set up in 2002, is the biggest producer of thermal power in Romania. There is a 10-day delay between ELCENs invoices to RADET and the date when RADET issues invoices to households, because the company has to read some 36,000 heat meters, the authorities explained. This is why, for years in a row, RADET has been unable to collect the money to pay its invoices in due time, and this delay led to penalties imposed by ELCEN.



    The thermal power producer took advantage of its position in the market and did not agree to streamline the economic circuit so as to help RADET from amassing penalties and artificial debts, the Municipality also argues.



    The Economy Minister Virgil Popescu promised however that the people of Bucharest will not be left without heating and hot water, because ELCEN is willing and able to continue to supply thermal power to households. The only aspect left to clarify is the operator that will carry and deliver it. The Bucharest City Hall announced its intention to take over the service through a company it has recently set up, Termoenergetica, but this company is neither licensed as a public utility, nor has it signed a contract in this respect with ELCEN.


    (translated by: Ana-Maria Popescu)

  • August 25, 2018

    August 25, 2018

    Protocols — The Romanian justice minister Tudorel Toader on Saturday announced the start of the procedure for the assessment of the managerial activity of Romania’s prosecutor general Augustin Lazar in the context of the protocols concluded with the Romanian Intelligence Service (SRI). The assessment results will be made public within 30 days at the most. The General Prosecutor’s Office announced it concluded in December 2016 two cooperation protocols with the Romanian Intelligence Service which were in force only for 3 months. One of them, which was made public, set the conditions for access to the technical systems belonging to the National Centre for Interception of Communications, while the other, which was classified, was related to cooperation regarding crimes against national security, terrorism as well as crimes made by the military staff within the Intelligence Service. The head of the Romanian Intelligence Service Eduard Hellvig said Friday that no such cooperation protocol between the Intelligence Service and other state institutions is currently valid. The speaker of the Senate and leader of the Alliance of Liberals and Democrats in the governing coalition Calin Popescu Tariceanu said that the news related to the two protocols between SRI and the General Prosecutors’ Office, even if officially denounced, was further proof of the SRI’s attempt to subordinate justice and violate the rights and freedoms of Romanians. The leaders of the governing coalition have repeatedly denounced the existence of secret connections between SRI and prosecutors.



    Moody’s — Moody’s Rating Agency maintained the BBB-/A-3 rating for Romania’s government debt on long and short term, in hard and local currency, reconfirming the country’s stable outlook, the Finance Ministry officials announced in a communiqué conveyed to AGERPRES news agency. Moody’s rating shows that Romania has a solid economic growth rate that will be maintained in the coming years, and this prospect for growth and the moderate level of public debt are reason enough for investors to trust the Romanian economy, claims the finance minister Eugen Teodorovici. According to the aforementioned source, some of Romania’s strengths underlying Moody’s rating include the country’s robust potential for economic growth on medium term, its moderate fiscal capacity and the moderate exposure to external risks. Moody’s ratings point to an increase, in the next 2 years, in Romania’s real GDP by 4% in 2018 and by 3.5% in 2019.



    Swine fever – The sanitary veterinarian authorities have confirmed the existence of the African swine fever virus in Romania’s biggest pig farm, the 2nd largest in Europe, located in the southeastern county of Braila. The farm has as many as 140 thousand pigs. All the pigs will be slaughtered starting on Monday. There are three more pig farms in Braila where the virus was confirmed. The African swine fever spread in counties from the northwest and southeast of Romania, affecting mainly pigs from households and farms. The producers’ associations believe that a state of emergency should be declared in the affected counties, as the companies that invested in the pig farming sector are on the brink of bankruptcy.



    Tennis — The pair made up of the Romanian Horia Tecau and the Dutch Jean Julien Rojer won the ATP doubles in Winston-Salem, North Carolina, the US, a competition offering total prizes worth 700 thousand dollars. They defeated 6-4, 6-2 the pair Jamie Cerretani (USA)/ Leander Paes (India). The Romanian-Dutch pair is to defend the title at the US Open, the year’s last grand slam tournament that will start on Monday in New York. In the US Open, Romanian Simona Halep, world’s no. 1 player and top seed, will be up against the Estonian Kaia Kanepi in the first round. Another 5 Romanian players will play in the singles. Mihaela Buzărnescu will first play against the Czech Marketa Vondrousova, Sorana Cîrstea will face the American Alison Riske, Irina Begu will be up against another American player, Jennifer Brady, Ana Bogdan will play against the Czech Marie Bouzkova, while Monica Niculescu will be pitted against Israeli Julia Glushko. Marius Copil, the only player in the men’s competition, will be up against Croat Marin Cilic, world’s no. 6 player, in the first round. (translation by L. Simion)

  • Greece, whereto?

    Greece, whereto?

    Europe is these
    days oscillating between anxiety and exasperation. Half of the Germans, for
    instance, are calling for ‘Grexit’, namely Greece’s leaving the Eurozone, as
    the country is on the brink of bankruptcy. On June 30th, Greece is
    supposed to reimburse some 1.5 billion Euros to the IMF, but the state’s
    treasury is empty, so the unblocking of the 7.2 billion Euro worth of aid that
    the IMF and the EU promised last year is imperative. Greece’s international
    creditors, however, have one condition: for Greece to get the money, it has to
    make savings and implement a number of reforms, especial with regard to the
    pensions system.

    The radical left, though, which is holding the reigns of power
    in Greece, seems engaged in a dialogue of the deaf. On the one hand, unlike the
    Germans, who plead for austerity and strict rules, the Greeks believe it’s
    illegitimate for anybody to force upon them a certain political and economic
    policy. On the other hand, they are counting on the European solidarity. But,
    the Europeans, who are now trying to find a solution, say’ enough is enough!’.
    Gathered in Luxembourg on Friday, the Eurozone finance ministers only needed
    one and a half hour to decide they could not authorize the disbursement of
    the financial aid to Greece.

    Subsequently, the Eurozone heads of state and government were summoned to an
    emergency meeting in Brussels on Monday, to discuss the situation from a
    political perspective. The usual summer summit is still due in late June, but
    there is not enough time left for the aid to be approved by the European
    parliaments. Without this help, though, Greece has no money to pay the IMF
    back, thus risking to default on all payments. In fact, the IMF Director
    Christine Lagarde was quite firm in stating that Greece will not benefit from
    any postponement. In the meantime, Athens has been looking for solutions,
    pendulating between the West and the East, more precisely between the EU and
    Russia, in an attempt to prove its economic and financial potency, apparently
    untouched by the sanctions imposed by Europeans against the background of the
    conflict in Ukraine.

    This past weekend’s meeting in St. Petersburg between the
    Russian president Vladimir Putin and the Greek Prime Minister Alexis Tsipras
    was the second after the one held in Moscow in April. Prior to Friday’s
    meeting, the Kremlin leader had stated that his country was ready to offer
    Greece financial support, particularly thorough energy infrastructure projects,
    more specifically by extending across Greece the Russian – Turkish pipeline
    ‘Turkish Stream’, owned by the Russian energy giant Gazprom, a project that was
    launched last year. Washington, however, has already voiced disapproval of
    Athens’s participation in this project.