Damages of tens of millions of lei at Transelectrica, discovered by the Court of Auditors

Listing of profitable state-owned companies on the Bucharest Stock Exchange seems not to have removed the habits of the political managements appointed to these companies regarding the collection of huge incomes, bonuses and increases, even if some of the employees with important management positions have proven at least negligence in their duties regarding the exercise of the duties received. One such case seems to be Transelectrica, where the audit report of the Court of Accounts discovered several irregularities and illegalities, which according to the data in the cited document would amount, at a first estimate, to a value between 41 million and 65 million lei, but the auditors within the public institution suggest that it could be much higher as long as they claim that all payments made by the state company for the projects that took place in the period 2020-2022 should be verified.

Although the audit report of the Court of Accounts drawn up following the control action carried out at Transelectrica is not published on the public institution's website, the document has come into the possession of the BURSA newspaper, as has the letter sent by Claudia Boghicevici, accounts advisor and head of Department IV of the Court of Accounts, to the management of the state-owned company as early as January 23, 2025, a letter requesting the remediation of 17 deficiencies found, plus other adjacent measures at the subsidiaries in the country, with a deadline of April 30, 2025, a deadline that was later extended to May 31, 2025.

We note that, following some serious issues found, the Court of Accounts notified the Prosecutor's Office about these, with the management teams from the 2020-2023 period to provide explanations to the prosecutors regarding the audit team's findings.

Among the most flagrant irregularities found are the granting of bonuses and salary increases outside the legal and budgetary framework. According to the data in the cited document, during the period 2020-2022 Transelectrica unjustifiably paid special bonuses of over 12 million lei and salary increases of over 29 million lei, without these amounts being provided for in the Revenue and Expenditure Budget. The funds were abusively redistributed from alleged savings, without supporting documents, contrary to the provisions of the Collective Labor Agreement, claim the auditors of the Court of Accounts.

The audit team within the Court of Accounts also identified payments of over 11 million lei following court decisions regarding performance bonuses and virtual stock options (OAVT) granted to former members of the Management Board and the Supervisory Board. Of this amount, over 8 million lei represents only penal interest. Moreover, according to the cited document, in one case Transelectrica lost the trial after filing the appeal late, which would have caused the state company a damage of over 4.2 million lei.

Also, the company's management during the aforementioned period ordered the payment of compensation of almost 4.7 million lei to former members of the Directorate, payments that in the opinion of the Court of Auditors are without legal justification, ignoring final court decisions that, if they had been executed, would have allowed the recovery of the amounts.

• Damage in investment contracts

The report prepared by the audit team sent by the Court of Auditors shows that in the field of investments made by Transelectrica, there were multiple violations: abusively modified contracts, unjustified price adjustments, lack of penalties for delays and unrecovered advances. The total estimated value of the damage from these practices would exceed, at a first assessment, 30 million lei.

An eloquent example in this regard is the non-collection of penalties worth over 10 million lei in a contract terminated for failure to meet deadlines. This is the works contract concluded with Romelectro SA for the 400 kilovolt power station in Stâlpu, worth 73.9 million lei, a contract that was terminated by Transelectrica in May 2023 when only 7% of the work was executed, because on February 3, 2022 Romelectro entered into insolvency.

The Court of Auditors found that the termination was made without calculating and recovering the late payment penalties in the amount of 10.19 million lei. Following this finding, Transelectrica issued an invoice at the end of November 2023 and requested the insurance-reinsurance company Exim România SA to execute the performance guarantee policy in the amount of 7.39 million lei concluded by Romelectro on November 7, 2019, a policy that was valid until May 5, 2023. The request made on November 28, 2023 by Transelectrica was rejected as being submitted late, after the expiration of the policy's validity period. In this context, the Court of Auditors shows that Exim Romania SA (Care Romania) communicated that "the decision of the insurance-reinsurance company Exim Romania SA is to refuse the payment of the compensation considering that the payment request formulated by Transelectrica SA is not opposable to us, is formulated late and at the same time abusive”. We mention that the respective invoice was registered in Transelectrica's accounting under the income chapter, but it can no longer be recovered.

Seeing that it was not successful with the insurance-reinsurance company, Transelectrica's management sent EuroInsol SPRL - judicial administrator of Romelectro - a payment request dated April 19, 2024 requesting the payment of 10.19 million lei as late penalties as found by the Court of Auditors. The respective request was rejected by EuroInsol SPRL, the judicial administrator's decision was contested by Transelectrica, but the Bucharest Court rejected Transelectrica's request as unfounded.

Auditors from the Court of Accounts also identified purchases of goods without clear economic utility, worth over 3.5 million lei, as well as payments of over 7 million lei made without supporting documents or for unexecuted works.

The audit report emphasizes that these deviations are the result of a chronic lack of internal control, faulty management decisions and poor governance. In addition, many of the Court of Accounts' previous recommendations have not been implemented, and responsibilities for these damages have not been established.

After receiving the audit report and the related letter from the Court of Auditors, instead of immediately remediating the violations found, Transelectrica management ordered the establishment of a commission made up of employees from several departments, including those from the Legal and Litigation Department, the Economic and Financial Department, the Integrated Management Department and the Human Resources Department, which prepared a 75-page report in which it does not recognize several violations found by the Court of Auditors and states that no damage was caused and no remediation is needed.

We note that regarding this report prepared by Transelectrica employees, two members of the current Board of Directors indicated, in a separate opinion, that the main causes of inaction are the personal interests of some members of the company's current management, involved in the decisions criticized by the audit team sent by the Court of Auditors. The two members of the Board of Directors indicate in their respective opinion that the other members refused to assume responsibility, thus perpetuating institutional passivity.

We note that both the internal report prepared by the departments within Transelectrica and the separate opinion formulated on May 30, 2025 by the two current members of the Company's Board of Directors are in the possession of the BURSA newspaper.

• Transelectrica's response

Contacted by the BURSA newspaper in connection with these findings and the measures to remedy the situation described in the Court of Auditors' report, Transelectrica sent a general response, in which it states that it has initiated the necessary steps to implement the recommendations imposed by the public institution.

The response signed by Ştefăniţă Munteanu (President of the Transelectrica Directorate), Vasile Moraru, Cătălin-Cristian Nadolu, Florin-Cristian Tătaru and Cosmin Nicula - members of the Directorate - states:

"Considering your request registered by the National Electricity Transmission Company Transelectrica SA with no. 19930/12.05.2025, we would like to inform you of the following information:

During the period 2020-2022, the National Electricity Transmission Company Transelectrica SA was the subject of a compliance audit carried out by the Court of Auditors of Romania. Following this audit mission, a series of recommendations were formulated for the Company, for the implementation of which the Company's management has initiated the necessary steps. Subsequently, as part of a follow-up action, the Court of Auditors will be able to verify and confirm implementation of these recommendations. Regarding your specific requests, we inform you that, in the absence of access to the exact content of the documents you refer to, as well as the possibility of verifying or validating their source, since the version of the Report or the Summary of the Court of Auditors' Report on the audited activities at the National Electricity Transmission Company Transelectrica SA was not published on the institution's official website, we are not in a position to issue a substantiated response".

Practically, the company did not provide concrete explanations regarding the damages or the corrective measures adopted, citing the lack of access to the official version of the Court of Auditors' report, which was not published on the institution's website. Thus, Transelectrica avoided commenting on the specific aspects, although these were presented in detail in the audit documents.

Curiously, the above response is also signed by the two members of the Board of Directors who gave a separate opinion on the report drawn up by Transelectrica's internal departments, an opinion that is in ownership of the BURSA newspaper, one of whom was a member of the Court of Auditors at the time the audit was launched.

As can be seen from the above, the Court of Auditors' audit of Transelectrica reveals an alarming reality: a strategic company of the Romanian state, located in a vital sector such as the energy sector, is affected by irresponsible resource management, lack of transparency and refusal to take responsibility. With a damage partially estimated by the Court of Auditors' auditors at tens of millions of lei, Transelectrica is facing a crisis of managerial integrity that risks perpetuating itself in the absence of firm and transparent measures.