Prosecutors to investigate tycoon's collapsed bid for Oltchim

02 October 2012 17:56  [Source: ICIS news]

LONDON (ICIS)--The Romanian government will ask prosecutors to investigate whether a media tycoon broke any laws while winning a bid for chemical company Oltchim which was subsequently thrown out by privatisation officials, Romania's prime minister, Victor Ponta, said on Tuesday.

Ponta said allegations that TV station owner Dan Diaconescu falsified documents would be probed.

"The privatisation bid has failed. This person has neither the financial capacity nor the real will to participate in this privatisation," Ponta said, after Diaconescu failed to handover his pledged €45m ($57.7m) for the state's 54.8% stake in Oltchim.

Prior to the 1 October deadline for paying for the stake won at a privatisation auction, Diaconescu arrived at the economy ministry with €2m in money bags, telling officials that the cash could be used to pay unpaid wages of employees at Oltchim as a first step towards his takeover of the company.

However, officials at the ministry refused to accept the money, saying the proper way forward would be for Diaconescu to first pay for a controlling stake in the company and then to address the issue of remunerating employees.

Responding to the threat of prosecution, Diaconescu said he had conducted his bid properly and would be looking at bringing legal action against the government for its handling of the privatisation.

Earlier on Tuesday, the government named a new CEO of Oltchim, former CEO of soda ash producer US Govora, Mihai Balan.

In the wake of the difficulties with Diaconescu's bid, the current privatisation had been cancelled in favour of launching a new sell-off process next year, the economy ministry said.

Oltchim’s main products are polyvinyl chloride (PVC), polyols, dioctyl phthalate (DOP) and caustic soda.

($1 = €0.78)

By: Will Conroy
+44 20 8652 3214

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