Popeci's acquisition of Automecanica Mediaş - a transaction with the original defects intact

The takeover of Popeci Utilaj Greu from Craiova by Automecanica SA Mediaş, which is being re-analyzed by the members of the Foreign Direct Investment Examination Committee (CEISD), following the re-notification of this institution, raises several question marks as long as the initial suspicions or flaws of this transaction have not been completely eliminated and the shadow of Sergey Glinka still hangs over the respective acquisition.

Sergey Glinka's withdrawal from the Automecanica SA Mediaş shareholding was presented as a solution to eliminate suspicions related to Russian influence in the transaction through which the Mediaş-based company aims to take over the Popeci Utilaj Greu factory in Craiova. However, this move does not eliminate the initial flaws of the acquisition, especially since, according to public data and official statements, the money for the purchase of the Popeci shares was paid in full as early as March 2024, during a period in which Sergey Glinka effectively controlled the Automecanica SA Mediaş group. In this context, the simple redrawing of the shareholding does not erase the traces of a transaction carried out under the shadow of a controversial influence, but only postpones the verdict of the economic security institutions, obliged to rule on the legality and opportunity of a takeover targeting a strategic point of the Romanian defense industry.

The Automecanica company has consistently maintained that there is no real withdrawal from the project, but only a re-notification of the transaction to the Foreign Direct Investment Examination Commission, to take into account the changes among the shareholders.

"I withdrew the application initially submitted to CEISD in order to re-notify it, taking into account the changes in the shareholding structure of the group of investors who signed the acquisition from Mr. Constantin Popeci. However, the project remains one of major interest to me personally and to Automecanica SA from Mediaş. Therefore, I recently re-notified CEISD in the new formula and I expect a favorable response as soon as possible”, Andrei Scobioală, the general director of Automecanica SA Mediaş, recently declared for Defense Romania. Moreover, he confirmed that all contractual obligations have been paid: "The transaction signed with Mr. Popeci Constantin is solid and balanced for both parties. All amounts assumed by the contract have already been paid in full. Currently, we are up to date with all contractual obligations”.

As for Sergey Glinka, the former majority shareholder of Automecanica SA Mediaş through Automecanica SKB Property SRL, his representatives recently stated to Press Hub that he no longer has any ties to Russia and that he has been operating in our country in accordance with European legislation.

"As for Mr. Sergey Glinka, he is a Romanian and Estonian citizen and has an economic activity carried out exclusively in the legal and fiscal space of the EU and the USA. Transmashholding, in which Mr. Sergey Glinka held a 5% stake, was sold in full in 2017,” his representatives said, insisting that the image of a "Russian businessman” is a label left over from the past and irrelevant today.

In addition to the above, we point out that Sergey Glinka was included by Forbes Russia in the top 300 richest Russian businessmen in 2013. In addition, Sergey Glinka noted in his CVs that he has significant involvement in the Russian company Transmashholding. Between 2002 and 2018, Glinka held, according to his CVs, important positions within Transmashholding, the largest manufacturer of locomotives and railway equipment in Russia, and worked closely with oligarchs Andrey Bokarev and Iskander Makhmudov. The latter is on the list of international sanctions imposed by the US.

But these are not the only connections of Glinka under international sanctions. According to data displayed by the Offshoreleaks database by the International Consortium of Investigative Journalists, Sergey Glinka is or was associated with the company Sermolent Equities Inc, based in the Virgin Islands, with Russian-Estonian Maksim Liksutov, who appears on the list of internationally sanctioned persons. According to information published in open sources, Liksutov allegedly used state funds, i.e. those of the Russian Federation, to help his former partners at Transmashholdi Aeroexpress, Iskander Makhmudov and Andrey Bokarev, who were also partners with Sergey Glinka. In the meantime, Liksutov became a member of the Board of Directors of Aeroflot and divorced his wife, so that she could take over the company that the controversial businessman owned.

However, even with these clarifications, the critical element remains the fact that Automecanica had already paid the equivalent value of the Popeci Utilaj Greu shares at a time when Glinka controlled the company, and this detail makes it impossible to completely separate the transaction from its past.

"On March 11, 2024, the share purchase agreement at Popeci Utilaj Greu SA was signed. The payment for the shares was made immediately, Automecanica SKB Property SRL acting in good faith and paying, from exclusively private capital, the company's debts and ensuring considerable capital injections for the relaunch of the activity", stated the representatives of Automecanica SA Mediaş for the cited press sources. In the same sense, Andrei Scobioală confirmed for Defense Romania that so far over 16 million euros have been invested to save the Craiova factory from bankruptcy, an amount that includes the value of the shares, but also payments to creditors and suppliers.

Beyond these explanations, the transaction approval procedure was not without its shadows. Information obtained by the press showed that the initial opinion to be issued by the CEISD risked being negative, which would have called into question the future of the Automecanica factory in Mediaş, already integrated into the COBRA II armored vehicle delivery program for the Romanian Army. In this sense, the temporary withdrawal of the request was more a strategy to avoid an official refusal than a simple bureaucratic formality.

In the case of this acquisition, Automecanica SA Mediaş is building its defense on two levels: on the one hand, the claim that the money invested in Popeci comes from private capital, directed to save the factory and transform it into a strategic asset of the Romanian industry; on the other hand, the delimitation from Sergey Glinka's past and his presentation as a legitimate European investor, without connections to Russian economic structures.

However, the reality remains that Popeci Utilaj Greu's entry under the umbrella of Automecanica SA Mediaş was made with financial resources mobilized during a period when Sergey Glinka was the central actor of the group, and any subsequent justification cannot erase this detail. While Automecanica SA Mediaş promises large-scale investments, a radical transformation and a "bet on Romanian industry", suspicions persist, because Glinka's withdrawal, even if real and official, cannot retroactively affect a transaction that has already been initialed and paid. Especially since there are no solid guarantees that he will not return as the majority shareholder of Automecanica SA Mediaş, after the CEISD will approve the takeover of Popeci Utilaj Greu, following the model initiated by his former business partner Maksim Liksutov.

In the absence of a firm clarification from state institutions, Romania risks building the future of its defense industry on a shaky legal and strategic foundation, in which the shadows of the past cannot be completely dispelled by simple shareholder repositioning. Especially since we are talking about the defense industry, which has strict regulations at the European level that currently exclude collaboration with partners from certain third countries, including Russia, as well as the use of amounts suspicious of coming from the respective states in financing the industry.