Syrian Businessman Hayssam Was Favored By AVAS – Court Of Accounts

The institution allegedly kept other foreign investors from obtaining information and accepted a three times lower price.

AVAS handed over to Syrian company Ogharit Trading, controlled by OmarHayssam, in September 2003, a stake representing 52.6% of Baneasa shares, for $3.1 million. The privatization contract was terminated two years later, since the investor did not perform the investments mentioned in the task book.

When the contract was concluded, AVAS was run by Ovidiu Musetescu.

The report issued by the Court of Accounts, which reviews activity in 2006 and includes the control actions unfolded in 2007, reveals that, even though Baneasa’s privatization was open to local and foreign strategic investors, the announcement was only published in local newspapers, which kept foreign investors, who did not conduct business in Romania, from having access to information.

In the evaluation and buyer selection stage, AVAS introduced a new criterion for preplanning, which said that the bidder, as majority shareholder/associate, should not have a history with worsening the financial situation of a company previously privatized.

At this point, the bidders were Ogharit Trading from Syria and the company Tender in association with Data Tim, as the former, represented by Omar Hayssam was selected to make the purchase.

"When Ogharit Trading was selected, AVAS held information regarding the faulty manner in which the contract unfolded in the privatization of the company Foresta Nehoiu, contract concluded with Omar Hayssam. The Court of Accounts feels that the AVAS decision to select Ogharit from Syria for the conclusion of the share purchase contract is questionable. Even though AVAS was aware of the situation in the companies where Hayssam held shares, it did not proceed to remove Hayssam from negotiations," the report said.

In negotiations with Ogharit Trading, AVAS accepted granting a series of facilities that were not included in the presentation brief, applying, according to the report, preferential treatment to Hayssam’s company, while the buyer vowed to pay a price per share three times lower than the AVAS offer. The company made a commitment to invest some EUR3 million in the company, while the state took on additional responsibilities, but without mentioning specific numbers in the privatization contract.

AVAS took it upon itself, through contract, to determine and take part in operations through which the buyer could obtain additional shares resulting from the conversion of debts owed to utilities suppliers, and Baneasa would benefit from state aid through the cancellation, exemption and recalculation of certain debts owed to public budgets and third parties, based on special granting laws. The obligations undertaken were achievable through the direct involvement of the Government, the Ministry of Finance as well as several companies that had not been previously contacted by AVAS.

For the property held by the company, spanning over a surface of 131,101 square meters, the appraiser, a newly created firm, set a price of $15 per square meter, in a context where the piece of land was located in an area of major interest for the real estate market. The low price was then justified through the fact that the property contained industrial buildings and constructions, which lead to the need of rehabilitation works from an environment perspective.

The Court of Accounts, however, felt that the evaluator set the land price randomly, without consulting or considering data, from specialized institutions, regarding the rehabilitation of the mentioned surfaces.

The privatization contract was terminated in May 2005, and the company entered special administration one year later, while the president of AVAS announced at the time that the company would once again be put up for privatization.

AVAS informed MEDIAFAX, in January, that Baneasa is undergoing restructuring through the organization into profit centers, asset and fixed means sales, layoffs, the restructuring of financial obligations and stock valuing.

Prosecutors within the High Court of Justice initiated, in April 2005, criminal investigations against Hayssam and several employees of the former privatization authority, seeking potential damages estimated at EUR3 million, resulting from the privatization of Baneasa.

Omar Hayssam, standing trial in Romania for terrorism in connection to the kidnapping of the three Romanian journalists in Iraq, was released from prison by the Bucharest Court of Appeal and fled the country. He is currently under an international all points bulletin.

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