The mandate contracts of the Hidroelectrica Supervisory Council members, proposed by the Energy Minister increase the risk of potential, corrupt and abusive practices, because they eliminate or substantially reduce a few of the key-obligations of the Council’s members, reads a press release of Fondul Proprietatea on Wednesday.
“Fondul Proprietatea expresses its indignation and surprise at the amendments proposed by the Energy Minister to the current mandate contracts of the Hidroelectrica Supervisory Council members. The proposed mandate contracts obviously increase the risk of possible corrupt and abusive practices, due to the fact that they eliminate or substantially reduce some of the key obligations of the Council’s members, that were provided for in the previous contract,” the document reads.
FP specifies that under the newly proposed contract, the Council’s members are no longer responsible for complying with the non-compete obligations, conflict of interest, refraining from requesting various services or maintaining the confidentiality of information obtained as a member of the Hidroelectrica Supervisory Council.
From the Fund’s viewpoint, this greatly increases the risk of corruption in the energy company, which could affect its present and future performance.
“The new mandate contract creates an extremely dangerous precedent, allowing the Council’s members to hold positions at the helm or within the councils of other energy companies. This situation basically opens Pandora’s box and raises serious concern regarding the determination and responsibility to act in the company’s best interest and not to use the Hidroelectrica Council membership position in order to pursue own purposes,” stated Greg Konieczny, CEO and Portfolio Manager of Fondul Proprietatea.
In his turn, Johan Meyer, Co-CEO and Portfolio Co-Manager of Fondul Proprietatea maintains that the change will lead to condoning that another member of the Council occupy the position of deputy general manager of an energy company that is a direct competitor to Hidroelectrica.
“Essentially, the change will result in the tolerance of the position of another member of the Council as deputy general manager of an energy company that is a direct competitor to Hidroelectrica. You cannot serve two or more divergent interests or more ‘masters’ at the same time,” Meyer said.
Greg Konieczny also said that these actions could negatively affect the interests of Hidroelectrica and of its shareholders, “leaving the door wide open to potential corrupt practices and the emergence of other “smart guys” who will drain Hidroelectrica’s resources.”