Romania’s Five Investment Funds Fall Sharply in Midday Trading on SIF 3 Transilvania, Drag Bourse Down

The BET-FI index slumped by 11.75% to 13,917.71 points at 1010 GMT due to a 14.89% fall in the stock of SIF Transilvania to 0.4 lei ($0.14/0.11 euro) in deals worth 2.1 million lei. All other BVB indices fell by more than 4.0% each.

"The falls reflect the uncertain situation with SIF 3 Transilvania’s capital hike. It is not clear what the effects for investors would be if a higher court rules against the capital hike," one broker told SeeNews.

Last Friday, the BVB suspended SIF 3 Transilvania from trading after a local court granted a claim against the fund filed by Daniel Stoica, a shareholder in Cocor, which is one of the fund's minority stockholders. The Brasov city court has ruled in favour of Stoica who had contested a decision of the fund to double its share capital. The fund said it would appeal the ruling within 15 days.

The Romanian stock market regulator CNVM said that SIF 3 Transilvania's shares will remain suspended from trading until the fund drafts a report on the "factual and legal implications" of the court ruling. SIF 3 Transilvania has sent the report to the CNVM and its shares resumed trading on Wednesday.

In April last year, SIF 3 Transilvania decided to double its share capital to 109.2 million lei through a bonus issue of some 546,071,666 new shares with a face value of 0.1 lei each.

At the end of June this year the High Court of Cassation in Bucharest rejected an earlier claim filed by Cocor, in which the company contested the capital hike. The ruling enabled CNVM to unblock trading in the bonus shares issued by SIF 3 Transilvania a year after blocking them.

(1 euro = 3.6214 Romanian lei)