Romania to Investigate Collapse of Oltchim Bid

Journalist-turned businessman Dan Diaconescu is to be investigated for allegedly falsifying documents to win a public tender.The privatisation department within the Ministry of Economy, OPSPI, has asked on Wednesday prosecutors to investigate whether the businessman and media owner Dan Diaconescu broke any laws in his bid for chemical company Oltchim which was subsequently thrown out by privatisation officials.

“Dan Diaconescu has tried to cheat the Romanian government and public by saying he has the money necessary to buy the majority stake in Oltchim”, reads a press release from the OPSPI.

Furthermore, Prime Minister Victor Ponta announced a probe into the allegations that Diaconescu falsified document in order to win the tender.

On September 21, Diaconescu offered 203 million lei [45 million euro] for a 54.8 per cent stake in the chemical firm. But ten days later, the government decided to cancel the bid after Diaconescu failed to handover the money he had pledged.

Prior to the October 1 deadline for paying for the stake he won at the privatisation auction, Diaconescu arrived at the Economy Ministry with around €2 million in money bags, telling officials that the cash should be used to pay the unpaid wages of workers at Oltchim, as the 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 the controlling stake in the company and then to address the issue of remunerating the employees.

“I want to give my money to Romanian people, as the government is not interested in the workers’ fate”, Diaconescu said publicly.

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.

Diaconescu is the owner of a populist TV station, OTV, which in the past has been penalised, among other things, for incitement to racial hatred and for broadcasting a video showing the former Prime Minister Emil Boc naked in a sports locker room.

Furthermore, he is also the leader of the People’s Party, PP, a party that advocates big tax cuts and higher wages and pensions.

According to a poll released on Wednesday, the PP may take third place, with about 13 per cent of the vote, in the general election due in early December.

Analysts say Diaconescu bid was just a PR farce given the coming elections.

“From the beginning it was hard to believe that a businessman whose media company is on verge of insolvency should have millions of euros to pay for a state enterprise that employs 3,000 people,” says journalist Sorin Stanescu.

“Now it is clear that Diaconescu was only interested in presenting himself in the media as the saviour of poor and unemployed. In the short term, he won, ” added Stanescu

Based at Ramnicu Valcea in southern Romania, Oltchim produces caustic soda, petrochemicals, agrochemicals, inorganic products and building materials. The company has registered losses for the last five years and has debts of around 500 million euros.

Production at Oltchim stopped last month, with the company apparently suffering from a lack of capital to secure feedstock supplies.

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