BUCHAREST (Romania), July 18 (SeeNews) – Romania Constitutional Court on Wednesday said that the law on setting up a national Sovereign Development and Investment Fund (SDIF) is unconstitutional.
The Constitutional Court ruled that the fund pooling 27 of the most profitable companies in which the government owns stakes should have been set up by a government decision rather than by a law, it said in a short statement.
The government announced its plan to set up the sovereign fund in August last year. In June this year, the parliament passed the law.
Shortly after, Romanian president Klaus Iohannis and opposition National Liberal Party (PNL), Save Romania Union (USR) and Popular Movement Party (PMP) challenged the law in the Constitutional Court.
SDIF is supposed to take the form of a joint stock financial intermediation company with the Romanian state as its sole shareholder. Among the companies in the fund's portfolio are Engie Romania, of which the Romanian state owns 34%, Electrica (48.78%), Delgaz Grid (13.51%), E.ON Energie Romania (31.82%), Biofarm (1.16%), Chimcomplex (12.89%), OMV Petrom (20.63%) and Antibiotice Iasi (53.02%).
The fund's share capital will consist of in-kind contributions, represented by share packages, and a cash contribution of 1.85 billion lei, of which 50 million lei will be paid up for establishing the fund, the finance ministry said last year.
The sovereign will aim to directly support economic development by investing in competitive sectors and raising capital on the financial market, the ministry explained.
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