JUDICIAL SOURCES:"The money of the SIFs would have ended in the bank accounts of their arrested executives, through Globalworth"

ADINA ARDELEANU, LOREDANA DUMITRAŞCU (Translated by Cosmin Ghidoveanu)
Ziarul BURSA #English Section /

"The money of the SIFs would have ended in the bank accounts of their arrested executives, through Globalworth"

The ASF withdraws Bîlteanu and Lakis' authorizations for serving on the board of directors of SIF1 

The prosecutors have also conducted searches at Ioannis Papalekas' residence, in the SIF Banat Crişana case

SIF Banat Crişana has invested 6 million Euros in Papalekas' fund, which then acquired Bîlteanu and Najib el Lakis' stake in Tower Center

UPDATE 12:29 SIF Banat Crişana announces that it has never owned shares in "Globalworth Real Estate Investments" 

SIF1 Banat Crişana announces that it has never traded, owned and does not currently own shares issued by the Globalworth Real Estate Investments fund, according to communiqué published on the website of the Bucharest Stock Exchange.

The company makes these clarifications in response to the article published by BURSA titled "JUDICIAL SOURCES: < < The money of the SIFs would have ended in the bank accounts of their arrested executives, through Globalworth > >".

"The information published by BURSA in the aforementioned article about SIF Banat Crişana is completely inaccurate", states the communiqué signed by deputy CEO Teodora Sferdian, which thus invalidates the information included in the report of the DIICOT prosecutors.

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UPDATE 09:50 The ASF withdraws the authorizations of Bîlteanu and Lakis for holding the positions of members on the SIF1 Board of Directors

The Financial Oversight Authority (ASF) has decided to withdraw the authorization for serving on the Board of Directors of SIF1 Banat Crişana of Dragoş Bîlteanu and Najib el Lakis, who were arrested preventively in the embezzlement case involving two of the SIFs, according to decisions sent to the Bucharest Stock Exchange (BVB).

The management of SIF1 is required to summon a general shareholder meeting within 30 days to fill the Board of Directors seats that have remained vacant.

The ASF has also withdrawn the authorization of Andrei Hrebenciuc to serve on the board of SIF Moldova, as he has been arrested in a case concerning illegal retrocessions of woodland.

The Board of Directors of SIF2 Moldova has the obligation to summon the General Shareholder Meeting in order to appoint a new director within a maximum of 30 days from the date the ASF passed the aforementioned decision.

Ioannis Papalekas, one of the most active real estate investors in Romania over the last few years, is being criminally prosecuted in the SIFs embezzlement case which the DIICOT is working on, which has seen so far the arrests of Dragoş Bîlteanu, the CEO of SIF1 Banat Crişana, and Najib el Lakis, member on the Board of Directors of SIF1, and lawyers Nicolae Mergeani and Victor Prodan, as well as stock broker Stere Gardan were placed under legal restrictions pending trial.

Judicial sources claim that Papalekas is in London, and the prosecutors have subpoenaed him to attend the hearings, after his apartment in Bucharest was searched. The investor is being charged with complicity in embezzlement and with the creation of a criminal group.

In July 2013, Globalworth Real Estate Investments, set up by Ioannis Papalekas, raised 53.6 million Euros from the AIM market of the London Stock Exchange, money which was going to be invested predominantly on the Romanian market.

According to some judicial sources, Dragoş Bîlteanu and Najib el Lakis sought to have the Bucharest Tower Center project (of Victoriei Square), which was owned by SC Tower Center International SRL, acquired by Globalworth Real Estate Investments Limited, thus allowing them to appropriate 6,353,400 Euros from SIF Banat Crişana SA, and 4,763,424.11 lei from SIF Muntenia.

According to the prosecutors' report, in the context of the IPO of the Globalworth fund, Papalekas reached an agreement with Dragoş Bîlteanu, by which the latter would have SIF1 and SIF4 buy Globalworth shares. Globalworth Real Estate Investments later cashed 6,353,400 Euros from SIF Banat Crişana, and 4,763,424.11 lei from SIF Muntenia SA, managed by SAI Muntenia Invest (also controlled by SIF1).

A stake in Globalworth worth 5.34 million lei appears in the 9-month financial statement of SIF Muntenia, but SIF Banat Crişana did not report a similar transaction.

In February, Papalekas' fund completed the acquisition of Bucharest Tower Center, of Victoriei Square, for 58 million Euros.

Ioannis Papalekas owned 50% of that company, while the remaining shares were owned by another company, controlled by businessman Dragoş Bîlteanu. Through the offshore called Pokandro Limited, Bîlteanu had already been paid, at the time of the announcement, six million Euros in cash, out of 11.6 million Euros, as well as 200,000 ordinary shares, at a price of 5 Euros per share, the price at which Globalworth had been listed on the secondary market of the London Stock Exchange. Over 2.5 million ordinary shares became the property of Stanuta Enterprises Limited, controlled by Papalekas.

Thus, after SIF Banat Crişana invested over 6 million Euros in Globalworth, the same amount entered the accounts of the SIF1 executives, through the offshore company they were controlling, according to the prosecutors' report.

Papalekas has recently made many acquisitions in Romania, through GlobalWorth (the company he controls), including Nusco Tower, the building which hosted the Volksbank headquarters. Papalekas is nicknamed "The faceless eagle", because he never appears in public. BURSA recently published an impressive picture of him, on Greek island Mikonos, where he bought a club, according to the Greek press.

The publication quotes Romanian sources which describe Papalekas as "ruthless" in business and capable of "smelling" the profitable opportunities. "In Romania, he is considered a leader of the real estate market", the quoted publication says.

In the "SIF Banat Crişana" case, the prosecutors have indicted 11 individuals and two companies, as two of the executives of SIF1 Banat Crişana are also being charged with stock market manipulation.

The prosecutors have also decided to place under legal restrictions Gabriel Filimon, the chairman of SAI Muntenia Invest, Gheorghe Bîlteanu, father of Dragoş Bîlteanu, and Sorin Boldi, member on the Board of Directors of SAI Muntenia Invest.

SIF4 shares, down 2.86%

Trading in SIF4 Muntenia shares was allowed to resume yesterday, ending the session with a drop of 2.86%, after falling as much as 5% intraday. The Financial Oversight Authority decided, on Monday, to suspend trading in the shares of SIF1 Banat Crişana and SIF4, as a result of the searches conducted by the prosecutors and its employees have also asked the issuers in question to report on what is being done to ensure the good operation of the companies.

SIF Banat Crişana yesterday stated that, given the arrest of CEO Dragoş Bîlteanu and board member Najib el Lakis, the Board of Directors will meet within the briefest delays to review the situation and to take the necessary measures, according to a communiqué signed by deputy-chairman Ştefan Dumitru.

"There are currently no elements that would affect the day-to-day operation of the company, as the executive management is ensured by executives authorized by the Financial Oversight Authority, in compliance with the legislation of the stock market and within the limits of competence approved by the Board of Directors of the company", the press release states.

The representatives of the ASF told us last night that, after the publication of the current report concerning the decision of the Board of Directors of SIF Banat Crişana (announced through the report published by the company), trading in the company's stock may resume, unless any new developments occur.

The Board of Directors of SIF1 currently has only three members, after two of them resigned: Ali Lakis, the nephew of Najib Lakis, and Adrian Petreanu. The former is also indicted in the prosecutors' cases, as his resignation was handed in just before the searches.

Horia Ciorcilă: "Our connection to the SIF Banat Crişana case is zero" 

Horia Ciorcilă, the president of Banca Transilvania thinks that the investigation concerning the embezzlement at SIF Banat Crişana and SIF Muntenia represents a blow for the Romanian stock market.

When asked about the effect this investigation would have on Banca Transilvania, given that the two SIFs hold significant stakes in the bank, Horia Ciorcilă said: "We do not know anything more than what has appeared in the press. Our connection to this case is zero. We do not predict any impact on Banca Transilvania. We have no more to say on this matter".

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