Thought Articles

The restitution of real property abusively taken over by the Romanian state before 1989 is an issue that even now, almost 20 years after the fall of Communism, still ignites social, political and legal debate. The dispute continues because, despite no less than four landmark laws on the matter, each massively amended over the years, no legislative solution has yet been able to justly, rapidly and definitively settle the conflict between former owners and the current holders of such property. Please note that we use the phrase ‘former owners’ to refer to the owners of real property at the time of the takeover, since it is customarily used to mark the difference from ‘current owners’, even though the lawfulness of the latter’s ownership is, more often than not, debatable.

In Romania, both the State and the administrative and territorial units (cities and counties) own properties consisting of real estate that, according to certain legal principles, belongs either to the public or the private domain. Public property includes all real estate that under the law or by its nature is of public use or interest. The state’s public property therefore includes areas such as roads, beaches and parks. Save for public property, any real estate can be subject to private property rights. As a general rule, any legal or natural entity may be the holder of private property rights.

Until recently, Romania knew only one system of management – the unitary system, where the management is formed by only the sole director/board of directors – applicable, with certain differences, to both joint stock companies (JSCs) and limited liability companies (LLCs). Following the World Bank’s 2004 Report on the Observance of Standards and Codes, which indicated deficiencies in the existing company legislation, changes brought to Romanian corporate law from 2006 sought to adapt it to the Organisation for Economic Co-operation and Development’s corporate governance principles, as well as to EU principles. One of the novelties introduced by the reforms is that JSCs can now choose between the existing unitary system and the newly introduced dual system of administration, where the management is formed of the supervisory board and the directorate.

This chapter was first published in the PLC Cross-border Labour and Employee Benefits 2008/09 Handbook: Volume 2: Employee Share Plans and is reproduced with the permission of the publisher, Practical Law Company. Main characteristics. As there are no specific regulations concerning share option plans, companies that implement these plans usually tailor their provisions to comply with similar plans in their home jurisdictions. A company usually grants its employees options to acquire a specific number of shares in the company at a price pre-determined by the employer. The price can be set according to the nominal or market value of the shares, or on a different basis. When the employees exercise their options, they receive the shares in exchange for the pre-determined price. The employer’s shareholders must approve the share option plan in a shareholders’ general meeting before the plan is introduced (Companies Law). This condition only applies to Romanian companies.

Reproduced with permission from Law Business Research Ltd. This article was first published in The Mergers & Acquisitions Review, (published in September 2008 – editor Simon Robinson). Robust economic growth (a 6 per cent GDP increase in 2007 and an 8.2 per cent in the first quarter of 2008), combined with a steady influx of foreign direct investment (€7.2 billion in 2007 and €1.58 billion in the first quarter of 2008), created favourable conditions for further consolidation of the Romanian M&A market in 2007/2008. According to market sources, in 2007 the local M&A market represented 5.7 per cent of the country’s GDP and ranked fifth in Central and Eastern Europe, after Russia, Hungary, Turkey and Austria, with a value of $8.4 billion, representing 4.4 per cent of the M&A market in Central and Eastern Europe (about $190 billion). Some 125 transactions were reported as concluded, averaging around €52 million per transaction, and totalling approximately €6.5 billion for 2007 alone, representing an increase of €0.5 billion on 2006.

This article is an extract from The 2008 Handbook of Competition Economics, a Global Competition Review special report - www.globalcompetitionreview.com Economic aspects seem to play a more important role lately in the defence of the companies under investigation before the Competition Council. The authority’s legal assessment on facts is often exposed to criticism before the relevant courts on the ground that it does not take into consideration the economic justifications of the facts presented by the defendants. In cartel cases, in the absence of direct proofs and the application of leniency procedures so far, the council tends to rely on indirect or circumstantial evidence corroborating the existence of a cartel by way of deduction, common sense, economic analysis or logic operation. However, the use and evidential value of indirect proofs seem cautiously evaluated in court.