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March 23, 2023

Insolvency provokes disputes between premier and entrepreneurs

As there are signs that the economic crisis is here to stay, insolvency became a national phenomenon in Romania and many see it as a method to defraud the state. Recently, PM Victor Ponta said that there are bad news regarding the collection rate of the profit tax after Q1, which is smaller than last year, the explanation being that companies prefer to file for insolvency. “(…) There are two explanations: on one hand there are big companies that go insolvent because, without a credit flow, they simply cannot cope with their obligations towards the state budget and providers, and the second – and this is where we must accelerate the modification of the law of insolvency – refers to those who go insolvent with bad intentions, in order to stop paying any tax, nothing of what pay the other companies which operate normally on the economic market, and continue operating, without paying any tax,” Ponta explained.The premier added that one must punish “directly with the bankruptcy the companies that fraudulently file for insolvency, or only to avoid paying taxes and dues.”On the other hand, Romanian entrepreneurs are in a desperate situation and say that the Romanian government took no measure to encourage the business environment and the Romanian industry, which is adrift.What example does the state give when two of its biggest companies – Hidro-electrica and Oltchim – are insolvent, wonders Georgica Cornu, owner of the Timisoara-based construction firm Confort, which became insolvent last year, quoted by zf.ro. Cornu based his development on businesses in infrastructure with the state and had 3,500-4,000 employees in the best year, but now he only has 500 workers and EUR 50 M owed to him by the state, as he complains.

“The state is an economic agent and should behave normally. It executes me if I am late with my payments to the budget, but he does not pay his assumed obligations,” explains Constantin Toma, owner of the Romet group of companies in Buzau. The Romanian entrepreneur says that the failure to pay arrears sent many local companies into insolvency, and the chain effect hit all industries. “Insolvencies are the cancer of the Romanian economy. In a healthy economy there must exist financial discipline. In ours, nobody is punished, even when evidence is clear. There should exist a law allowing the verification of the conclusions reached by prosecutors in cases of insolvency. Judges and prosecutors must have their control body, too,” believes Valeriu Leucuta, owner of Cable SRL Oradea, a company with a turnover of EUR 5.7 M and 10 employees, which lost EUR 900,000 last year following the insolvency of 10 business partner companies.

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