HOW A MINOR DETAIL BECOMES TELLINGThe Board of the Bucharest Stock Exchange has forgotten its own Regulation

MAKE (Translated by Cosmin Ghidoveanu)
Ziarul BURSA #English Section / 04 aprilie 2014

An article for the memory of Lucian Anghel.

An article for the memory of Lucian Anghel.

A small article published in BURSA which concerned a minor detail - the fact that the CEO of the BSE has bought shares in the company while the regulations of the latter prohibited him from doing so - caused quite a ruckus: first of all we received a right of reply from the BSE, which twists the meaning of the Regulations, a reply in which the BSE accuses our newspaper of "affecting the credibility and the reputation" of the BSE and of its representatives, threatening us with "legal action"; then, the BSE posted an announcement on its website, attempting to explain the legal basis of allowing the CEO of the BSE to buy shares in the company; on our website, a controversy began around the topic, even though some people warned that this was an inconsequential topic, compared to the real problems.

In this context, I want to remind that the subject of our article was not that the CEO has bought shares in the BSE - that's fine and may he enjoy their fruits! - but rather the compliance with the Regulation, which he was the first one called upon to uphold.

The suspicion that he has failed to abide by it is no longer insignificant, with that being the case, and if that gets confirmed, then the fact that we have reported is no longer minor.

But, meanwhile, new things have surfaced.

Octavian Molnar, a member on the Board of the Exchange, told us that Ludwik Sobolewski bought the shares in the BSE because the Board itself has decided that the CEO is entitled to a compensation which he is required to spend on buying shares in the BSE.

First of all, we want to note how ridiculous the people who have defended Sobolewski yesterday on the BURSA website have become, by saying that Sobolewski should have been praised for choosing to buy shares in the BSE, instead of in the Warsaw Stock Exchange.

Of course he did, he couldn't do otherwise!

Mr. Molnar told us: "Sobolewski had to be rewarded for his work, and since the Bucharest Stock Exchange couldn't buy back shares, the Board of Directors has decided to allocate to him an amount which he was required, through the contract, to use for buying shares in the BSE".

Second of all, let's note that not only does Sobolewski not know the Regulations of the BSE, but neither do the members of the Board of Directors, or perhaps, the Board as well as the CEO, construe it as they see fit, as proven by the response sent by the BSE.

Once again, the fact is not inconsequential, because it illustrates the chaos in an institution that should set an example when it comes to compliance with the regulations and the manner in which they are updated and adapted to the new strategic intentions, so that we no longer run into those cases that were so frequent in the past, when "life got ahead of the law" (a turn of phrase used for justifying chaos and haphazardness).

Another representative of the BSE backs the bizarre logic used in construing the Regulation, claiming that the managers of the BSE are not subject to the restrictions of the employees, since they are concerned by a separate article that "expressly restricts the acquisition of shares issued by a brokerage firm or by people involved in it, or by another market or system operator, respectively".

Some people share the idea that Ludwik Sobolewski had the right to buy shares in the BSE, arguing that his work is performed through an agency agreement, but we don't see how that changes anything: if he works based on an agency agreement, does that somehow mean that the CEO is no longer a part of the staff of the BSE?

Article 99 of the regulations of the BSE prohibit the staff of the BSE from buying shares in the BSE.

Is Sobolewski part of the staff of the BSE or not?!

According to the Dictionary of the Romanian Language, the definition of "staff" is "the number of individuals working in a company in an institution (...)"

Does the Dictionary of Polish terms have a different definition?

At any rate, I want to warn him that in Romania it's the Romanian dictionary that takes precedence.

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