Damen Mangalia: Chronicle of a bankruptcy with the State at the helm

Bankruptcy, in the economic sense of a business collapse, does not necessarily begin when a court issues a ruling. Sometimes, it begins much earlier: in ministry offices, in Parliament, in boardrooms, and within institutions that are, by law, tasked with protecting the public interest. In the case of the Damen Mangalia Shipyard, a series of political, legislative, administrative, and fiscal decisions raises serious questions regarding the role played by the Romanian state in the decline of a company of strategic importance. To understand the scale of the problem, this article aims to reconstruct the mechanism by which each decision affected the company's operations, its ability to secure contracts, its relationship with the investor, and, ultimately, the creditors' prospects of recovering their funds.

At the heart of this story lies a fundamental contradiction: the Romanian state sought to hold a majority stake, yet it required the capital, expertise, order book, and managerial capacity of its Dutch partner. In 2018, the arrangement agreed upon between the state and Damen attempted to reconcile these two objectives. The state acquired a 51% stake, following the transfer of two percentage points from the Dutch partner's share, while Damen retained managerial and operational control. Although unconventional, this arrangement formed the contractual basis of the investment: the majority of the share capital belonged to the state, while the responsibility for industrial management rested with the private investor.

This distinction is crucial. Holding 51% of the shares does not automatically equate to providing 51% of a company's financing. Similarly, bearing the bulk of the financial risk does not necessarily grant control over the political and legislative decisions that shape the company's operations. The case of Damen Mangalia illustrates just how vulnerable such a partnership can become when the state simultaneously acts as a shareholder, legislator, regulator, and tax creditor.

• Fulfilling a milestone under the National Recovery and Resilience Plan (NRRP) - a document drafted by the PNL-USR-UDMR coalition during the Cîţu administration - lies at the root of the conflict between Damen and the Romanian state

The first major rift emerged in 2023. Law no. 187/2023, adopted as part of a corporate governance reform and in line with commitments made by Romania, eliminated the legislative exception that had allowed the management structure agreed upon in 2018 to function. The issue was not the state's objective to improve the governance of public enterprises; rather, it was that applying these new rules to an already established partnership risked unilaterally altering the contractual balance upon which the Dutch investor had agreed to finance and manage the shipyard.

On August 4, 2023, Damen publicly announced that it had served notice of the termination of the partnership agreement. The company maintained that it had repeatedly warned the authorities in the preceding months about the consequences of the legislative changes. The conflict, therefore, did not arise out of the blue. The state was aware of the private partner's position and the risk of a breakdown, yet it failed to identify a solution that would preserve both the reform's objectives and the operational viability of the investment.

This raises the first question regarding political accountability: what impact assessments did the Government and the Ministry of Economy conduct before the new legislation affected the management mechanism at Mangalia? Were the consequences for ongoing contracts, financing, banking relationships, and future orders analyzed? Were the risks of litigation with the investor quantified? And, above all, who took responsibility for the possibility that a strategic shipyard might be left without stable operational leadership?

It should be noted that, in articles published by the newspaper BURSA, we pointed out that the impasse was not limited to a legal dispute regarding the implementation of the 2018 agreement. Between October 2023 and May 2024, state representatives on the shipyard's Board of Directors and in its General Meeting blocked the approval of the company's budget, thereby hindering management's ability to make operational decisions. Through • Şantierul Naval 2 Mai SA• , the Ministry of Economy held a 51% majority stake in • Damen Shipyards Mangalia• . Consequently, state representatives exerted a decisive influence over the functioning of the company's governance mechanisms.

An industrial company cannot function properly when its budget remains blocked for months on end. In the absence of an approved budget, making decisions regarding investments, procurement, hiring, contracts, and the financing of operations becomes significantly more difficult. In the shipbuilding sector, where contracts span long periods, require substantial funding, and entail strict deadlines, managerial uncertainty can lead to particularly severe commercial consequences. A potential client does not need to wait for a court ruling to conclude that the contractual risk is too high; they can simply place their order elsewhere.

In light of the above, the state's responsibility cannot be discussed solely in terms of a legislative change with unforeseen consequences. It must also be examined in relation to the specific decisions made by its representatives, who participated in the company's management during the period when it was losing its operational capacity. This sequence of events was also publicly cited by former Minister of Economy Irineu Darău during a press conference on October 14, 2026. Darău explicitly held former PSD ministers responsible for the insolvency of the Damen Mangalia Shipyard and the loss of orders, demanding explanations regarding the accumulation of debt and the deterioration of the company's financial situation. Furthermore, he asserted that those involved should be held politically accountableand, should the competent authorities identify legal violations, held liable under other provisions of the law as well. The minister's accusations are serious and carry particular weight: they do not merely come from an aggrieved investor or external observers, but from the very head of the institution that exercised state authority over its industrial stake.

• The intervention of the National Agency for Fiscal Administration (ANAF) transformed an industrial dispute into a tax-related legal matter

Alongside the rift between the state and Damen, the company also came under the scrutiny of tax inspectors. The first inspection began on September 12, 2023 - just over a month after the Dutch group's public announcement regarding the termination of the partnership agreement -and concluded on June 13, 2024. The report was issued on July 19, 2024. A second inspection took place between July 10 and August 14, 2024, with the corresponding report finalized on August 21.

This chronological sequence does not, in itself, prove the existence of a politically motivated tax audit. ANAF has both the right and the obligation to verify compliance with the law, including in the case of companies with majority state ownership and transactions between affiliated entities. However, in a company already strained by conflict among its shareholders, the nature of tax findings and the quality of the reasoning behind them become critical. The tax authorities cannot treat the absence of a specific document as an automatic presumption that an economic activity never took place, nor can they conflate commercial failure with the non-provision of services.

Tax documents obtained by the newspaper • BURSA• highlight precisely these types of issues. Regarding management services provided by Damen Workforce Romania, tax inspectors established an additional taxable base of 5,909,682 lei for the 2021-2022 period, citing insufficient supporting documentation and an inability to properly identify the services rendered. The contract stipulated a monthly cost of 55,000 euros for the management team, a figure notably lower than the 200,000 euros per month often seen in state-owned enterprises. Yet, the tax inspectors went beyond the issue of documentation, evaluating the management's performance based on the company's financial situation.

This approach raises a fundamental question: a company may incur losses even when management services have been genuinely provided. Management might make poor decisions, lose contracts, or oversee a company affected by external factors, none of which renders the managerial activity itself "non-existent" in retrospect. If the National Agency for Fiscal Administration (ANAF) challenges the reality of the services, it must demonstrate why the available documentation, activities, and verifiable outcomes fail to substantiate the invoiced services. The mere fact that a company has fallen into a difficult financial position cannot serve as a substitute for such a demonstration. The same issue arises in the case of work carried out by Aktiv Ship, where inspectors refused to grant tax recognition for expenses totaling 50,936 lei, citing the absence of a contractual acceptance document, the Final Performance Report. The company submitted invoices and other supporting documentation; however, the reasoning provided in the tax inspection report fails to explain, with sufficient specificity, why these documents could not substantiate the execution of the work. In the case of Alewijnse Marine Galaţi, deficiencies were cited regarding progress reports, acceptance protocols, and other supporting documentation for expenditures totaling 4,096,150 lei. Certain shortcomings of this nature can be decisive from a tax perspective. The question remains: did the inspectors examine the entire body of evidence, including technical records and the feasibility of reconstructing the transactions, before disallowing these expenses?

Professional training also came under scrutiny. The fact that some individuals trained for trades required by the shipyard were not subsequently hired was used as part of the tax authorities' argument. Yet, a professional training program can serve a genuine economic purpose, even if it does not culminate in recruitment. In an industrial sector plagued by a lack of orders and instability, the failure to hire trainees does not automatically prove that the training lacked economic justification at the time the expenditure was incurred.

A second tax inspection report continued the dispute concerning management services and transactions between affiliated entities. For the period spanning 2023 through the first quarter of 2024, the contested expenses in this category totaled 8,015,952 lei. Once again, the core issue concerns the evidentiary standard: administrative, financial, IT, and management services can support a company's overall operations without each individual service generating an immediate, clearly identifiable revenue stream. European case law provides an important point of reference. In case C-527/23, Weatherford Atlas Gip, the Court of Justice of the European Union established, in December 2024, the limits within which tax authorities may assess the necessity and commercial appropriateness of intra-group services for the purpose of VAT deductions. While the ruling does not exempt the taxpayer from the obligation to prove that the services were genuine and used for taxable operations, it prevents the automatic substitution of the company's commercial judgment with the subjective assessment of a tax inspector.

It should be noted that all tax inspection reports have been challenged in court by Damen. For instance, case file no. 407/36/2025, currently before the Constanţa Court of Appeal, concerns a challenge to the second inspection report and related tax documents. The commissioning of an accounting and tax expert report to examine the deductibility of expenses, the economic purpose, and the conditions for VAT deduction demonstrates that these matters require technical analysis.

• The State retained 51% of the shares, while Damen ended up bearing almost the entire burden of the debt

The most significant financial contradiction in the Damen Mangalia case emerges when comparing the shareholding structure with the structure of claims (liabilities/receivables). The Romanian State held 51% of the shares, while the Damen Group held 49%. However, this distribution of share capital did not reflect the actual distribution of financial risk. According to statements made by the Minister of the Economy, Irineu Darău, during a press conference on October 14, 2026, the Dutch group had come to hold approximately 95% of the total claims against the company, while debts owed to the Romanian state accounted for only 5%. The Minister spoke of total debts amounting to hundreds of millions of euros and demanded explanations from former PSD ministers regarding how these debts were accumulated.

This proportion is significant, though a distinction must be made. Citing documents from the sale process, Digi24 indicates that Damen Holding BV holds approximately 70% of the total claims, whereas Irineu Darău refers to a 95% share for the Damen group. This discrepancy may stem from the inclusion of claims held by subsidiaries and other affiliated entities, differences in the timing of the calculations, or variations in the scope of the total claims. Without an updated, definitive schedule of claims, it cannot be asserted that these percentages are directly comparable. Nevertheless, both accounts make it clear that Damen is the dominant creditor of the shipyard.

This situation creates an economic and institutional paradox. The state held the majority of the shares and possessed the capacity to decisively influence the company's governance. The Dutch group, conversely, ended up bearing an overwhelming portion of the financial exposure. Consequently, when the company entered bankruptcy, the recovery of claims became dependent on the value of its assets and the rules governing insolvency proceedings, rather than on the proportion of shares previously held.

• The euro138 million sale: how euro46 million evaporated from the initial price

The final chapter of this story is, perhaps, the one that raises the most questions regarding the divergent interests of the state and the principal creditor. Following the shipyard's entry into bankruptcy, its assets were put up for sale at an initial price of 184 millions of euros. On October 9, 2026, Rheinmetall Real Estate România SRL was declared the winner of the auction with a bid of 138 million euros, representing 75% of the initial price.

The chronology of the procedure, reconstructed by News.ro and presented by Digi24, is essential. On May 14, 2026, the judicial liquidator, CITR, requested the court's authorization to dispose of the asset, in accordance with the Code of Civil Procedure, a mechanism that allows for a price reduction under certain conditions. On the same day, Damen Holding submitted its own proposal: six consecutive monthly auctions, all starting at the initial price of 184 million euros. This strategy was approved by the Creditors' Assembly on May 22. On June 11, Şantierul Naval 2 Mai - a state-controlled company - requested the application of the procedure that allowed for a price reduction. Following auctions that failed to attract buyers, the insolvency judge approved a change in the disposal method, and in October, the asset was awarded for 138 million euros.

This chronology is significant because the state did not merely play a passive role as a spectator to the proceedings. Through its own company, it intervened in favor of a sales mechanism that permitted a reduction in the price. The court authorized the change in procedure, and the outcome was the sale of the assets at a value 46 million euros lower than the initial price.

An important distinction should be made here: the initial auction price does not necessarily represent the market value that could have actually been achieved. Four auctions without any buyers provide a valid argument for revising the asset disposal strategy. At the same time, the fact that an asset failed to attract buyers at a price of 184 million euros does not, in itself, prove that reducing the price to 138 million euros was the only possible solution, nor that it had to be carried out at the pace approved by the court.

Damen is challenging this very mechanism. According to Digi24, the Dutch group argues that the insolvency judge applied a version of Law no. 85/2014 that had been amended in late 2025 an amendment which removed the 12-month maximum time limit for the disposal of assets. The Dutch party also disputes the interpretation of what constitutes a "reasonable timeframe." The challenge is scheduled to be heard by the Constanţa Tribunal on November 4, 2026.

Should Damen's interpretation be upheld, the legal consequences could be significant. Conversely, if the court finds that the change in procedure was both lawful and economically justified, the price reduction will be deemed to have a solid legal basis.

The State, acting through the "2 Mai" Shipyard, presents its own arguments. In court documents cited by News.ro, the company's representatives contend that Damen contributed to delays in the proceedings by failing to attend certain creditors' meetings and by rejecting the strategy proposed by the liquidator. Furthermore, they argue that the accumulation of new claims during the bankruptcy process would diminish the recovery prospects for all creditors.

• The State recovers its claims; Damen is left with the losses

Statements by former Minister of Economy Irineu Darău indicate that the authorities have assessed the potential for recovering significant liabilities owed by the shipyard to public institutions. The Minister cited approximately 160 million lei owed to the state budget primarily to the National Agency for Fiscal Administration (ANAF), 18 million lei to the local administration of Mangalia, and 10 million lei to the "2 Mai" Shipyard; this is in addition to amounts paid out from the Guarantee Fund for the payment of wage-related claims. In total, these three categories amount to 188 million lei, roughly 37-38 million euros, based on an indicative exchange rate of five lei to the euro.

The Minister stated that these obligations would be settled before any remaining funds are distributed to other creditors. The economic disparity is difficult to ignore. According to BURSA, the shipyard's total debts approach 400 million euros, while the amount offered for its assets is 138 million. When compared to the total liabilities, the winning bid represents only about 34.5%. If the entire 400 million consists of admitted claims - and assuming no other assets or recoveries exist - the shortfall would be approximately 262 million euros, even before accounting for the costs of the legal proceedings. In such a scenario, the primary creditor faces massive losses. The larger the sums distributed on a priority basis to other categories of creditors, the smaller the amount remaining to satisfy the rest of the claims. This is the economic stake behind the challenge filed by Damen: not merely the difference between two tender prices, but the prospect of recovering an additional portion of the funding and obligations the company is claiming.

There is a deeper issue. If the state, through its own decisions, contributed to the paralysis of the shipyard's operations and subsequently stands to recover its own claims during the bankruptcy proceedings, a contradiction arises that must be investigated: is it appropriate for a public authority to contribute to the deterioration of an enterprise and subsequently be financially protected by debt-recovery mechanisms, while the private partner bears the brunt of the losses?

It should be noted that there is, as yet, no final court judgment or ruling from the international arbitration tribunal in Vienna - where a case brought by Damen Holding against the Romanian state for failure to fulfill obligations under the 2018 investment agreement is currently pending - establishing that the state intentionally caused the bankruptcy of Damen Mangalia or sought to shift losses onto the Dutch investor. Nevertheless, the question regarding institutional responsibility is legitimate, and the answer cannot be reduced to the mere assertion that the insolvency proceedings comply with the law. The legality of each stage and the responsibility for the prior degradation of the company are two distinct issues that must be examined separately.

• Sorin Grindeanu points the finger at the USR. But what does the chronology of the decisions affecting the shipyard reveal?

Against this backdrop, statements made by Sorin Grindeanu in the plenary session of Parliament on October 20, 2026, during the investiture vote for the Niculescu government, have opened a new chapter in the political confrontation. The PSD leader demanded an explanation from the USR regarding what he termed "the plunder of the Mangalia Shipyard."

This accusation comes just days after former Minister of Economy Irineu Darău held former PSD ministers responsible for the shipyard's entry into insolvency. The two political stances are diametrically opposed. However, none of these can replace an analysis of the documents.

The chronology established in the pages of the newspaper BURSA over the last few years shows that the association agreement was concluded in 2018; that a legislative amendment affecting the management mechanism occurred in 2023; that the rift with the investor and budgetary deadlocks were reported in 2023 and 2024; and that the contested tax audits took place during the same period. Subsequently, insolvency, bankruptcy, and the liquidation of assets followed in 2026. Responsibility must be assigned to the individuals and institutions that actually held decision-making power at each stage, rather than being automatically shifted to a political party based on the current political landscape.

For the PSD, specific questions arise: what did the Ministers of Economy and the state's representatives do to prevent the contractual breakdown? Why was no solution found to unblock the budget? Who monitored the accumulation of debt and the risk of losing orders? What measures were taken to protect the investment and the jobs?

For the USR and the former leadership of the Ministry of Economy, the questions concern, in particular, the liquidation phase: why was the price-reduction procedure supported? How were the interests of the creditors evaluated? What guarantees exist regarding the industrial future of the facility, and how does the Rheinmetall project relate to the SAFE funding?

• Who is accountable for what happened at the Damen Mangalia Shipyard?

The Damen Mangalia case is not merely a conflict between the Romanian state and a foreign investor. This also serves as a test of how Romania manages complex industrial partnerships, honors contractual commitments, and protects the economic value of strategic assets.

Several relevant facts emerge from the information above: the state held a majority stake; legislative changes in 2023 altered the contractual management framework; the Damen Group warned of the consequences and gave notice of the agreement's termination; the business press documented impasses regarding budget approval; the National Agency for Fiscal Administration (ANAF) conducted audits, the findings of which are now being contested; the shipyard fell into bankruptcy; the state supported a liquidation process that allowed for a reduction in price; and the assets were ultimately sold for 138 million euros, against a backdrop of total reported debts of approximately 400 million euros.

The financial scale of this matter makes it impossible to dismiss it as a mere political dispute. The 46-million-euro gap between the initial price and the final sale price, the public claims of at least 188 million lei - as noted by the former Minister of Economy - and the total debts of nearly 400 million euros all demand transparency regarding every decision that influenced the recoverable value.

Given these circumstances, it is highly suspicious that a companypossessing strategic industrial infrastructure, an international investor, and shipbuilding capabilities ended up in a situation where its assets were liquidated through bankruptcy, leaving the primary creditor facing potential losses amounting to hundreds of millions of euros. The Romanian state cannot rely exclusively on bankruptcy rules to explain the final outcome, without also accounting for its own decisions in the years leading up to the bankruptcy. If it recovers its claims, if Damen loses the bulk of the amounts claimed, this outcome must be analyzed in light of the company's entire history, not just the final stage of the legal proceedings.