Teodor Ancuţa, at the end of his tenure: "Sibiu is Romania"s Chicago"

Laurenţiu Popa (Translated by Cosmin Ghidoveanu)
Ziarul BURSA #English Section / 03 mai 2011

Teodor Ancuţa, at the end of his tenure: "Sibiu is Romania"s Chicago"

The former president of Sibex talked to "BURSA" about his plans for the future and - with a certain degree of detachment as can be seen - about the Sibiu exchange. The interview also discusses other hot topics such as the status of consultant Patrick Young in the near future, the relationship between Teodor Ancuţa and his rival Cristian Sima - who was elected by the shareholders of Sibex as the new president - the outlook on the merger with the BSE. Mindful of details, Teodor Ancuţa spoke about administrative matters, such as the headquarters of Sibex, the rental rates in the area and the number of people that would be needed to extend the trading schedule.

Reporter: This is a time for evaluations. Please draw the line and make a quick presentation: where did you begin and what have you achieved with the Sibiu Exchange?

Teodor Ancuţa: We started from scratch in April 1994, and then we created the commodities exchange. We had a share capital of 33.8 million lei, which was a fair amount at that time. That"s how we started. In 17 years, we built the Sibiu Exchange step by step in order to make into a respectable institution. We now have everything a major exchange operator has. We have a spot market, we have an ATS, we have derivatives, a Clearing House and a Depository. Each of these components was built with a lot of effort, and let"s not forget - with money from the shareholders. And that means that we had credibility in their eyes. Still, in this period of crisis, the shareholders have contributed 2.5 million Euros to increase the share capital, money which the depository needed. We are now an exchange that has all the components it needs. I said at the general shareholder meeting that 2010 was the best year for Sibex in terms of organization. We were the first self-listed exchange, we were the first to have an ATS. That"s on the spot market.

We have launched the Sibex Depository, as well as contracts based on the Dow Jones Industrial Average and on gold. The latest big achievement was the regulation issued by the CNVM which gave us the go ahead for nominee accounts. It was the last unsolved issue.

Reporter: How do you see the Sibiu exchange in the future?

Teodor Ancuţa: It is an exchange that needs to sell its products and make money for shareholders. It needs to increase the trading volume and the price of its shares exponentially. It is an institution that doesn"t have a rival and it would be a good thing if it began selling futures contracts, like its peer in Taiwan. Just for comparison, even though Taiwan has a far smaller population than Romania, they had 230 million contracts. What we need to do in in Romania is to be create better awareness about Sibex among the public. There are still many things left to do. We"ve brought in Patrick Young, Europe"s top derivatives expert.

Reporter: Speaking of Mr. Young, does he still have a future with Sibex, with the changes brought about by the election? Not just the change of management, but also with the fact that the shareholders of Sibex have voted in favour of the merger with the BSE, which Mr. Young was against.

Teodor Ancuţa: He"s got a job to finish. On May 5th, his consulting contract with Sibex will expire. At the end of his contract, he will draw up a report in which he will include his findings and his proposed solutions. Aside from that, Mr. Young is employed by us to help us contract European grants. I am referring here to an amount of 5 million Euros, which will be used for providing professional training to brokers, to our customers and to companies looking to get listed. I don"t think this was public knowledge.

Reporter: Back to talking about the future again...

Teodor Ancuţa: Let"s make it clear. I"ve been saying for a year that I want to resign. Mr. Sima will need to prove that he can do a better job at managing Sibex than someone else. I hope we will have a capable person at the helm. I will handle other businesses I own. I have an investment in Păltiniş and I need to spend almost all of my time over there, I also have my butchery... When you own a business, you need to be there constantly. There comes a time when you need to help others do things better than you did, to leave the business to your heirs. And that requires a lot of work. Concerning my future, I want to start living for myself, which is something I haven"t done lately. I want to stay with my grandkids, who are growing fast, I want to read, it"s been a long time since I last went to the theatre or seen a movie.

Reporter: What would you answer if the BSE asked you to be their advisor on the derivatives side?

Teodor Ancuţa (laughs): Never. I don"t betray my children. Regardless of the amount that I might be offered. Everything I did so far, I did because I enjoyed it. Everything that I"ve achieved, I"ve achieved by working. I"ve studied, I"ve translated a lot of materials... Sibiu is the smallest city in the world to have an exchange, which could be considered a record. In 1997 I said that Sibiu would become Romania"s Chicago. And it has.

Reporter: So I understand you will remain as an advisor with Sibex? Even though it is now led by Mr. Sima, who competed against you?

Teodor Ancuţa: I"ve worked with Mr. Sima before. You shouldn"t be surprised by this, but the relationship between the two of us was actually good. I said I would step down anyway. He said I would remain an honorary chairman. He told me that some time ago and I feel honoured by it. Those who attended the General Shareholder meeting applauded him when he said that. It is a way of showing appreciation for my merits over all of these years. Still, I couldn"t stay here on a salary instead of doing better with my own businesses.

Reporter: What do you think about the decision of the BSE to postpone the merger?

Teodor Ancuţa: The BSE didn"t want the merger, it just wanted to stop us from growing. I for one, wanted that merger. I was convinced that what was happening in Bucharest was just for show. If Mr. Sima wants to keep waiting until June... And the postponement of the General Shareholder Meeting of the BSE is keeping us deadlocked. The Warsaw Exchange won"t connect to Sibex until these discussions about the merger are over. This would allow us to have dual listings, in Sibiu and Warsaw.

Reporter: Why is Warsaw so important now?

Teodor Ancuţa: There is a Romanian company that wants to get listed at Sibiu and in Warsaw. Such a listing would be possible after the implementation of nominee accounts, because that is how the people in Warsaw work.

Reporter: Can you tell us the name of the company?

Teodor Ancuţa: (hesitating) No.

Reporter: The first decision made by Mr. Sima is the extension of the trading schedule, until 23:15, to overlap with the New York session. You know, the Dow Jones contracts ...

Teodor Ancuţa: I didn"t want to implement this modification, because some brokerages firms were against it. They complained about not having enough employees. And they were right, they needed to hire more people to do it right. I think that we would need at least 5 people. Or definitely 4, anyway. One in IT, one in clearing, one at the exchange ... They add up. Furthermore, we need to see if we can cover these expenses, that we would incur in the second half of the day. When it gets done, I"ll deal with it. There will be a trial period of a few months, to see how it is working. I am talking about the overhead costs, because, while the market may close at 23:15, by the time everything is settled for the day, the people would still be there after midnight working.

Reporter: As a joke, could you extend the schedule to cover Tokyo? That way, Sibiu would be working around the clock!

Teodor Ancuţa: (laughs) Yes, that would be something! If it were done electronically, we could work non-stop.

Reporter: Again back to more serious plans for the future. How do you feel about Sibex relocating to a bigger, more spacious, and imposing headquarters?

Teodor Ancuţa: This depends on the decision of the shareholders. Right now, Sibex has a headquarters for which it pays a low rent. I have a plan to expand this alternative and make it more profitable. Let me give you some figures: it"s a total built area of 1,060 square meters, of which Sibex is charged for 940 square meters of usable surface at 10 Euros/square meter each month, according to the contract. I only make 8.51 Euros/square meter, and 7 Euros after taxes. The good thing is that they don"t pay VAT, because the contract is concluded with an individual instead of a company. Running the numbers shows that I get 6,720 Euros month, plus 2,500 Euros for an area of 70 square meters that I rent to the Money Channel.

Reporter: So, you are the owner of the building in which the exchange is now located?

Teodor Ancuţa: I am the owner of the building and I am renting it to them. At the rates that I"ve told you about. If they find a lower rent anywhere else, they can move straight away. This price was lower than anywhere else in Sibiu. Some charge 15 and even 20 Euros/square meter. We are talking about Sibiu after all, it"s a rather important city. Those are the prices around here. And there is also a parking lot, and an area which has an energy generator. I haven"t even included those in the rent.

Reporter: So when it is all said and done, what is your future at Sibex?

Teodor Ancuţa: Some people may say that they"ve kicked me out. Nobody kicked me out. I wouldn"t have stayed just to be a puppet on the board, I don"t want to work for anybody else. I wouldn"t have accepted anything like that. My term as president and CEO was set to expire next year and I wanted to split the two positions. Now I see that Mr. Sima wants them both. At this moment, I am still in office and the new management will take over once it is validated by the CNVM. The president has been elected, but I will resign from my position of managing director as soon as possible.

Reporter: We have talked a lot about what"s happening within the walls, inside Sibex. In closing, what is your message to people on the outside? Brokers, issuers, investors. What should they make of this change at Sibex?

Teodor Ancuţa: I want to advise them to support the exchange, so it can grow. If they have any concerns about the future, they need to speak about them. So far we have had order and rigour in Sibiu. They should remain as confident in it as they have been so far. The employees of Sibex are doing their job. I know that they will refuse to go through with anything illegal that would be asked of them.

Reporter: Thank you!

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