The response of SIF Banat Crişana can be suspected of attempted market manipulation; the NAV is knowingly being manipulated

English Section / 07 august 2020


(A response in ten points and a Note addressed to the Reply by SIF Banat Crişana)


Under the title "SIF Imobiliare - a case that illustrates the sorry state of our capital market", BURSA published a complex material, made up of not one, but two articles, one signed by MAKE, the second signed by Andrei Iacomi (subtitled "Câteva sute de lei au ridicat cu peste un miliard Activul Net al SIF1" - A few hundred lei have raised the NAV of SIF1 by over 1 billion); the former in fact shapes the meanings of the facts reported in the latter.

The response signed by the lawyer representing SIF Banat Crişana ignores the complex structure of the material published in BURSA and briefly reproduces the information published by the paper, alleging that the articles published by BURSA "carry the risk of misleading investors and potential investors, by disseminating false information according to the provisions of art. 120 paragraph ( 1) letter c) of the Law no. 24/2017."

In other words, the risk of manipulating the market.

In fact, everything that the representative of SIF Banat Crişana is saying in his response is already there in the article published by BURSA, which reproduces the information disseminated via the official reports by SIF Banat Crişana; if there is any risk of market manipulation, then it originates in the Official Reports of SIF Banat Crişana, but so far we have not made that claim.

On the other hand, the response by the representative of SIF Banat Crişana can be suspected of being intended to manipulate the market, a fact which we will show hereinafter.


The distorted price of the shares of SIFI, a fact which is acknowledged by SIF Banat Crişana, distorts the NAV of SIF Banat Crişana, which the representative of SIF Banat Crişana omits to mention in the Reply addressed to BURSA.

They only mention the distortion of the price of SIFI, keeping quiet about the distortion it causes to the NAV of SIF Banat Crişana.

The distortion caused to the NAV of SIF Banat Crişana is not a tendentious insinuation.

It is a fact.

Keeping quiet about that fact falls under the provisions of art. 120 paragraph ( 1) letter c) of the Law no. 24/2017.

That means that the reply addressed to BURSA by SIF Banat Crişana can be suspected of the intention to manipulate the market.

Using its right of reply, SIF Banat Crişana tried to intimidate the Editorial Office of BURSA, so that we don't dare to notice that the distortion of the price of SIFI leads to the distortion of the NAV of SIF Banat Crişana.

3. SIFI does not meet the requirements for being listed on AERO, BUT SIF BANAT CRIŞANA DOES NOT DELIST IT

According to the "Extended Guide for being listed on AeRO" found on the BSE website), the company that wants to get listed there must have a free-float of 10%, have 30 shareholders, or the BSE must think that the conditions exist for maintaining an orderly market in the stock.

SIFI does not meet any of the requirements for being listed on AERO:

- it has a free float of 0.0003%;

- it has a maximum of 14 investors;

- three trades of one share each, over the course of two years, is exactly the opposite of the definition of an orderly market.

Since the beginning of the listing of SIFI on AERO, in December 2013 and until today, it has been impossible to maintain an orderly market for its stocks, which is actually what the Reply by SIF Banat Crişana is saying:

"We have always considered that these trades do not have a legitimate nature from a commercial point of view, and that their goal is to create a misleading image about the price of the traded financial instruments".

So, SIFI has no reason to be listed on AERO.

Still, SIF Banat Crişana did not withdraw SIFI from the AERO market.


In his article in BURSA, Andrei Iacomi showed:

"Still, it was being mentioned that even in the absence of a liquid market for the SIFI shares, the market trades from that period could not normally and reasonably be considered to have a legitimate justification from a commercial point of view, which is why through the Notice no. 1112 sent by SIF Banat-Crişana on May 28, 2019, the ASF has been asked to analyze the trades involving the SIFI stock from the point of view of a potential violation of art. 120 of the Law 24/2017 concerning issuers and market operations and of art. 12 of EU Regulation no. 596/2014 concerning market abuse".

The response by SIF Banat Crişana acknowledges the fact that the SIFI shares do not make the orderly market and that the pricing may be manipulative: "As we also mentioned in the multiple notifications sent to the ASF, the stock trades made sporadically and at unjustifiably high prices are owed to the transfer of shares that are part of the «Free float» owned by the minority shareholders, and not by SIF Banat-Crişana S.A., we think that the goal of producing these price discrepancies is to distort the price of the shares of SIF lmobiliare Plc and to mislead investors about the real value of these securities".

The response of SIF Banat Crişana features two logical fractures.

The first

SIF Banat Crişana holds 99.9997% of SIF Imobiliare (4,499,961 shares), and the other shareholders hold 0.0003 %, (13 shares), according to the BSE website ( and so, if it has suspicions about the validity of the SIFI trades on the AeRO platform, it can, at any time, through a General Shareholder Meeting, delist SIF Imobiliare.

The logical fracture consists of the fact that the "multiple notifications addressed to the ASF" provide no benefit to SIF Banat Crişana, the solution to the problem is in own hands - the delisting of SIFI.

Besides, what benefit does it get from the SIFI being listed?


The second

SIF Banat Crişana is putting forth an unrealistic theory, that the distortion of the price of the shares of SIFI is intended to mislead the investors holding ... 13 shares.

Of 13 shares, six were owned by companies which are in the portfolio of SIF Banat Crişana, at the end of 2019 (companies which SIF Banat Crişana was saying they did not participate in the trades).

That leaves a maximum of 7 (seven) investors.

If we look at the history of SIFI trades, we find that the number of holders of shares in the free float of SIFI falls drastically to 4 (four) or even fewer.

It would follow that one of the four is selling shares of SIFI distorting the price, to mislead the other three.

That's nonsense.

Is this an issue that would require "the multiple notifications" to the ASF?


Why doesn't SIF Banat Crişana delist SIFI?

What benefit does it get from keeping SIFI on AeRO?


The distortion of the price of SIFI, in the trade with one share, performed at a price of 286 lei, of May 19, 2020, has an influence of over 1 billion lei on the value of the NAV of SIF Banat Crişana.

It is a common observation.

I have never stated anywhere that the trade was made by Bogdan Drăgoi, by Najib el Lakis, by anybody else involved with SIF Banat Crişana.

I have stated the truth when I said that without that trade with one SIFI share, the NAV reported by SIF Banat Crişana would fall by one third, and the discount of the share of SIF Banat Crişana on the Bucharest Stock Exchange would fall by about half.

Which would not be beneficial to SIF Banat Crişana.


The Net Asset Value (NAV) of SIF Banat Crişana of 3,522,448,960 lei and the Net Asset Value per Share (NAVPS) of 6.8458lei/share are reported on the website of SIF Banat Crişana; the problem of the distortion of the price of the shares of SIFI and of its influence of that distortion on the NAV appears in a NOTE printed in smaller letters, in the footer of a document (appendix no. 16), which the reader arrives at clicking on "Details".

If you don't click, you don't find out that the NAV of SIF Banat Crişana is inflated by almost one third.

A similar situation exists on the website of the BSE, if one is very attentive, they may find out that there is a problem with the NAV of SIF Banat Crişana.

On the other hand, on the website of the Association of Fund Managers (AAF), there is not a chance of getting the correct information; over there the NAV of 3525.29 million lei and the NAVPS of 6.8458 lei are displayed without any clarification.

No right of reply, no press release can replace the absence o any clarification about the inflated NAV and NAVPS of SIF Banat Crişana, from the website of the professional association they are a part of.

I think that this situation falls under the provisions of art. 120 paragraph ( 1) letter c) of the Law no. 24/2017 - Market manipulation.


The NOTE of appendix no. 16 of the NAV Report for SIF Banat Crişana on the BSE website and its own, states the following: "We inform investors that the NAV of SIF Banat-Crişana on 30.06.2020 includes the amount of the stake in SIF Imobiliare PLC appraised at 1,287 million lei, representing 286 lei/share (the market price on the date of the last trade of February 19, 2020)".

The Report doesn't mention the scale of the distortion of the NAV of SIF Banat Crişana caused by the distortion of the price of the SIFI stock.

BURSA has calculated it: 1.083 billion lei.

The NOTE does not include the clarification of the NAV which would have presented the distortion caused by the deal with SIFI shares.

BURSA has calculated it: 2.442 billion lei.

Without these clarifications, even with the NOTE of Appendix no. 16, the investor is left without information, and a normal market watchdog would force the issuer to present complete information.

But the ASF is not a normal market watchdog.


For over a year, SIF Banat Crişana has been knowingly displaying a distorted amount of the NAV.

SIF Banat Crişana chairman Bogdan Drăgoi passes the blame onto the Financial Oversight Authority (ASF), in a press release displayed on the BSE website (see the Press Release ), while also sending this right of reply to BURSA.

In short, Drăgoi is saying that it has asked the ASF, one year ago (May 28, 2019), to use a different method of calculating the value of the shares of SIFI, but that the ASF (through its SI/DRA no. 2690.1/18.06.2019) has forced him to use the current calculation method which leads to the distortion of the NAV of SIF Banat Crişana (red the entire story in the Press Release).

From the Press Release signed by Bogdan Drăgoi it follows that he has known for a year that he has been displaying a distorted NAV of SIF Banat Crişana.

Regardless of whether Drăgoi thinks that "Given the elements shown above, we think that the Company has taken all the available actions it could have taken to clarify every aspect concerning the trades with SIFI shares as well as those concerning the reflection of these shares in the assets of the Company", the posting of a distorted value of the NAV of SIF Banat Crişana falls under the provisions of art. 120 paragraph (1) letter c) of the Law no. 24/2017 - Market manipulation anyway.

In reality, Bogdan Drăgoi did not exhaust every way to avoid the market manipulation.

In all this time, a year and a half, since Bogdan Drăgoi was fighting in vain with the ASF to convince it to apply an adequate method for calculating the NAV of SIF Banat Crişana, he could have decided in the General Shareholder Meeting of AGA SIFI to delist SIFI from AeRO.

Thus, the manager of SIF Banat Crişana would have ended the market manipulation of SIF Banat Crişana.

But it didn't.

Therefore, from the Press Release of SIF Banat Crişana we find that the blame for the manipulation of the market also includes the ASF, but that does not mean the manager of SIF Banat Crişana is blameless.


In the Accompanying Address for the Right of Reply of SIF Banat Crişana, its representative wrote that they are asking for a the publication of the right of reply "[...] on the grounds of art. 49 and 51 of the Decision no. 220/2011 concerning the Regulatory Code for Audiovisual Content [...]", skipping over the provisions of art. 50, which we reproduce below:

"Art. 50 - (1) The right of reply cannot be requested: a) for opinions and assessments of value expressed or to issue opinions and assessments of value; [...]"

But SIF Banat Crişana issues a Reply to Assessments of Value - the ones expressed in the text signed by MAKE - and does so without arguments.

Moreover, the reply of SIF Banat Crişana issues opinions and assessments of value:

"[...] we feel that, through the publication of the article in question it can be considered that there is a risk of misleading investors and potenţial investors, through dissemination of false information, according to the provisions of art. 120 paragraph ( 1) letter c) of the Law no. 24/2017."

Of course, the expression "we think that ... it can be considered" is extremely unfortunate, in terms of wording and logic, but the main aspect in the context of the law is that it issues opinions and assessments of value.

Meaning it does not abide by its legal grounds.


Of course, anyone can write a Right of Reply using any law as a justification, but as a newspaper, you don't expect being asked to publish a Right of Reply based on the Law of the Air Traffic Code, for instance.

I hereby carry out the difficult task of informing the lawyer of SIF Banat Crişana that BURSA is not a radio or TV station and has nothing to do with audiovisual, it has nothing to do with the Decision no. 220/2011 and has nothing to do with the National Council of Audiovisual, which is an institution which we respect, but we have nothing to do with it.

Newspapers are created based on a different law.

It is not allowed to request a Right of Reply for the simple fact that it is a tool of pressure on the press and and it can be used for intimidation, just as we feel is the case with the Reply of SIF Banat Crişana.

On the other hand, BURSA has always granted the Right of reply.

The reply must be decent, concern the topic of the article and not make considerations on the author of the article or the publication.

As can be seen, we have published the Reply of SIF Banat Crişana, even though it did not follow these rules and even if it's legal base is mistakenly invoked.

It doesn't matter.

The truth above all!


In its Reply, the representative of SIF Banat Crişana requests the following:

"The claims in the article in question on the individuals of SIF Banat-Crişana SA are tendentious and without a legal merit and we demand you remove the article from your publication".

But in the Address that accompanies the Reply, the same representative of SIF Banat Crişana is requesting:

"For the purposes of a complete and correct information of the readers, we urge you to publish its entire contents [ed. note: of the Right of Reply], together with the right of reply".

I sat for four days thinking how I could meet the two requirements of the representative of SIF Banat Crişana, because if I delete the article I can no longer place the Reply next to it, and if I set it next to it, then I can no longer delete the article.

On the fourth day, I remembered an example from the manual of logic:

A customer asks the waiter for a steak with no potatoes, and the waiter replies that they don't have steak without potatoes, only steak without rice.

From that we draw the conclusion that, in a larger reference system, things can be considered the results of the way in which they have been generated.

Therefore, the solution to the two requests of the representative of SIF Banat Crişana is the following: we have published the article and next to it we have published the Right of Reply, then I deleted the article next to it, taking it back, to its place on the date of its publication.

Thus, the Right of Reply accompanies the article, even if now it is no longer visible.

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