The ASF, forced to pay to Claudia Sava, the head of the Oversight and Audit Commission of the institution over 200000 Euros

George Marinescu
English Section / 10 octombrie 2020

The ASF, forced to pay to Claudia Sava, the head of the Oversight and Audit Commission of the institution over 200000 Euros

Claudia Cătălina Sava has been awarded a ruling by the Court of Bucharest a few days ago, whereby it receives a bonus for her entire employment with the former National Securities Commission (Comisia Naţională a Valorilor Mobiliare - CNVM), of 1032228 lei (over 200,000 Euros). Her happiness will probably be marred by the fact that the ruling awards her 3.5 million lei (over 700000 Euros) less than what she requested in her lawsuit.

The County Court of Bucharest has decided, in case 35429/3/2015, on October 7, 2020, to partially admit the request by Claudia Cătălina Sava against the Financial Oversight Authority, the institution which employs her as head of the Oversight and Audit Division. According to the ruling of the court, the ASF is required to pay Claudia Sava the net amount of 1032228 lei, representing the wage she was entitled to upon the expiration of her term as CNVM member, as a bonus for her entire activity. The court rejected the plaintiff's demand for interest payment, so the plaintiff will get paid 3.5 million less than requested. The ruling of the Bucharest Court can be appealed within 10 days from its issuing, and such a subsequent appeal would be tried by the Bucharest Court of Appeal.

Based on how the ASF has acted in other similar cases which were on the docket of the courts, it is possible that in the current situation both parties will file an appeal: Claudia Sava - to get the difference of 3.5 million lei as penalty interest, and the ASF - in order to avoid paying any of the amounts in question.

Claudia Sava is the wife of the former deputy mayor of Bucharest, liberal Răzvan Sava, who was mayor of Bucharest in the first part of 2016, after the suspension of Sorin Oprescu. Claudia Cătălina Sava, head of SIIF oversight and audit at the ASF, is receiving for the current position a lower amount than she was paid while at the CNVM.

Thus, whereas she would earn 155,000 Euros a year in 2012, with the CNVM, last year she was paid by the ASF "only" 112,000 Euros. For comparison, the current president of the ASF, Nicu Marcu last year earned as vice-president of the Court of Auditors 35,000 Euros less than the current head of the Oversight and Audit Department of the ASF.

If we analyze the yearly income of the Mrs. Sava at the ASF, we find that, essentially, through the ruling of the Court of Bucharest the head of the Oversight and Audit division gets the equivalent of the two-year income at the ASF. As a mere bonus.

Based on her statement interests submitted this year, we also note that the head of the Oversight and Audit Department of the ASF holds stock in the five SIFs - most of them in SIF 3 Transilvania, that she is a member on the Board of Directors of the Financial Studies Institute and manager of MBPosh Couture SRL. Also for comparison, the current head of the ASF, Nicu Marcu, does not hold any share in the SIFs nor does he own any stocks.

Dorina Mihăilescu, another one who was "awarded" by the ASF, with the help of the courts

Former CNVM vice-president (June 2005-November 2007) Dorina Teodora Mihăilescu is in a similar situation with Claudia Sava. Dorina Teodora Mihăilescu also served as commissioner (November 2007-April 2013) at the same institution and as non-executive member of the Board of the ASF (April-October 2013). Dorina Mihăilescu, who is currently a non-executive member of SIF Muntenia, has sued the ASF to make the amount of 5,144,219 lei (over 1 million Euros), as severance package she was entitled to upon the expiration of the employment contract with the CNVM.

In the session of June 4, 2020, in case no. 10932/3/2016, the Court of Bucharest admitted the request of Dorina Teodora Mihăilescu and ruled that the ASF should pay Mrs. Mihăilescu "the bonus she was entitled to for her entire activity, upon the expiration of her term as chairman of the National Securities Commission, in the net amount equivalent to 9 times the biggest gross monthly income of the duration of her term, updated by the consumer price index, as well as the payment of the legally calculated interest starting from the date of April 29, 2013 upon the date of the making of the payment, with the withholding of the taxation quota of 85% stipulated in article 24 paragraph (11) of the Emergency Government Ordinance no. 93/2012".

The ruling in question was challenged with an appeal by the plaintiff and the ASF alike, but the Bucharest Court of Appeal did not set a hearing for that case, because the judges of the Court of Bucharest have not yet issued an argumentation for the ruling of the initial trial.

Perhaps Dorina Mihăilescu challenged the decision because of the application of the taxation of 85% on the bonus in question, which would only leave her a benefit of just 771,000 lei (over 150,000 Euros), compared to the amount of 5,144,219 lei she asked for in the lawsuit.

Dorina Teodora Mihăilescu joined the CNVM in June 2005, after being a deputy in the Romanian Parliament, between 1990-1992 on the lists of the FSN (National Salvation Front) and reelected in 2004 on the list of the National Union PSD+PUR.

Dorina Mihăilescu was one of the close collaborators of former social-democrat prime-minister Adrian Năstase and she may have been the person that coordinated the recording of the PSD meetings and their transcription, in the famous case of the shorthand transcripts of the PSD meetings of 2004, which includes statements concerning the pressuring of some judges and prosecutors in resolving certain criminal cases and concerning strategies for influencing the public opinion or certain categories of employees, particularly teachers, in order for the PSD to win the local and parliamentary elections that year.

According to some information published by the mass-media eight years ago, Dorina Teodora Mihăilescu, as CNVM commissioner, was involved, through her relationship with Viorel Hrebenciuc, in the scandal tied to the postponement of the General Shareholder Meeting at the Sibiu exchange - Sibex, where the dismissal of the directors was going to be requested, as well as in the scandal concerning the protecting of the entities illegally acting in concert at the SIFs. At the time, Dorina Mihăilescu acknowledged that when it comes to the SIFs she had talks with Viorel Hrebenciuc concerning the making of additions to the legislative framework concerning acting in concert and direct and indirect holdings, but denied any involvement in the Sibex scandal. Apparently the manner in which Dorina Mihăilescu acted towards the amendment of the legislation in favor of the SIFs, earned her, on March 14, 2018, the current position held at SIF Muntenia, as well as that of member on the Board of Directors of SAI Muntenia Invest, companies which are both led by Bogdan Drăgoi and Najib el Lakis.

If the ASF loses the lawsuits brought by its former employees, then the amounts it will have to pay them will surpass 20 million lei

The two aforementioned cases are part of the group made up of 153 former employees of the ASF who took advantage of their contractual terms, of the internal regulations of the three institutions (the CSA, CNVM and CSSPP) which have been merged into the current ASF, as well as of the stipulations of the government ordinances issued by the Ponta governments in 2012 and 2013 concerning the organization of the ASF and the restructuring of that public institution. The application of the normative acts issued by the Ponta governments pertaining to the ASF has allowed a lot of wiggle room in terms of their interpretation, which allowed the bringing of several work-related lawsuits demanding the payment of millions of lei in compensations to all of those who were laid off following the creation of the Authority.

The wages in question were going to be taxed, according to the Emergency Government Ordinance 55/2013, at 85% for all those who held management positions at the time of the termination of the individual employment contract, but in the case of the employees that had not, the tax rate for the severance packages would remain unchanged - 16%, with the employees in question to receive significant amounts upon their layoffs.

That is why the ASF saw many lawsuits being filed against it. Some of them were resolved amicably by paying the compensations in question, to the tune of millions of RON to the petitioners, a few were denied by the appeal courts, but in most of them, the former employees of the ASF received satisfaction from the court, with the lawsuits in question now at various stages at the Bucharest Court of Appeal or the High Court of Cassation and Justice.

If the ASF loses those lawsuits, the amounts it will have to pay to its former employees exceed by far 20 million lei.