The private management at CFR has fizzled

EMILIA OLESCU (Translated by Cosmin Ghidoveanu)
Ziarul BURSA #English Section /

The private management at CFR has fizzled

Fenechiu to the World Bank: "The private management is doing worse than the former state managers" 

After about three months at the helm of CFR SA, Dimitris Sophocleous has resigned from the position of private manager of the company, due to the fact that the Minister of Transports has rejected the administration proposed by the Board of Directors (CA).

According to the law, this leads to the termination of the term of the directors, which accuse the politicians of being "desperate" not to lose control of a state-owned company and of the European grants.

The state owned company states: "We estimate that this abrupt change is not based on any economic arguments, as the company's situation has improved over the last few months, but rather by the desperation of the political factor not to lose its influence on the resources of a state owned company and of the European financing".

Dimitris Sophocleous recently said that the management plan was approved by the Board of Directors and that the administration went "to the Ministry of Transports for review and approval". According to him, the members of the General Shareholder Meeting (AGA) have said that an adjustment of the actions of the administration plan was requested.

Dimitris Sophocleous said yesterday, in a press release: "We think that at this moment the commitments made by Romania to the international financial institutions are in peril, together with the credibility of the representatives of the government in this relationship. As a result of the rejection of the administration plan I have handed in my resignation from the position of the managing director of the CFR". He mentioned that three months after taking over his mandate, he has already obtained results for the company, and he provided examples such as the reduction of the arrears to the state budget from 620 million lei, in December 2012, to 540 million lei, in March 2013, the payment to date of the social security contributions for employees, after a long period of delays and with additional earnings of 1.3 million lei, after the renegotiation of the leases.

"In this context, the president of the Board of Directors of CFR SA Lucian Isar and general manager Dimitris Sophocleous express their concern over the non-transparent manner in which the positive transformation of the company was interrupted and rendered uncertain", the quoted press release also says.

The press release also states that the private management has begun renegotiation with the suppliers to reduce the amounts paid by CFR SA, has begun the process of recruiting the new managers, has earned over 9 million lei from the sale of first batch of used rolling stock, through the Romanian Commodities Exchange and has succeeded in preparing and delivering, in two months of the management and receivership plan, which includes the reorganization of the company.

Aside from Dimitris Sophocleous, the directors of CFR SA are Lucian Isar, Enache Jiru, Dănuţ-Leonard Sandu and Florian Raimund Kubinschi.

A few days ago, Minister of Transports Relu Fenechiu told the representatives of the World Bank that in some state owned companies "private management is doing worse than the state management", and said that CFR Marfă and CFR Călători "now have private management" and, "unlike other cases, they also have effective management".

Former manager at companies such as Romtelecom or AD Pharma and president of the Board of Directors of the real estate developer Impact, in January Dimitris Sophocleous took over the position of general manager of CFR, following a process of headhunting for professional managers.

The General Shareholder Meeting has appointed a new Board of Directors, which consists of Sorin Mîndruţescu, CEO Oracle România; Peter Weiss - ex Country CEO Bancpost and former president of ABN Amro Romania (RBS Romania); Peter Raimund Kubinschi; Enache Jiru and George Micu, privatization advisor and chief of cabinet of Cristian Ghibu - the former general manager of CFR, appointed secretary of state in the Ministry of Transports by Relu Fenechiu.

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