REG - Soc EnergElectricaSA - Resolution-Litigation Against RO Court of Accounts

Societatea Energetica Electrica SAAnnouncement

07/07/2023 16:15

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RNS Number : 3952F  Societatea Energetica Electrica SA  07 July 2023

To:                              Bucharest Stock
Exchange (BSE)

                                    London
Stock Exchange (LSE)

Romanian Financial Supervisory Authority (FSA)

 

Current report in compliance with the Law 24/2017 on issuers of financial
instruments and market operations, the Romanian Capital Market Law no.
297/2004, FSA Regulation no. 5/2018, and the Bucharest Stock Exchange Code

Report date: 07 July 2023

Company name: Societatea Energetica Electrica S.A. (Electrica)

Headquarters: 9 Grigore Alexandrescu Street, 1(st) District, Bucharest,
Romania

Phone/fax no.: 004-021-2085999/004-021-2085998

Fiscal Code: RO 13267221

Trade Register registration number: J40/7425/2000

Subscribed and paid in share capital: RON 3,464,435,970

Regulated market where the issued securities are traded: Bucharest Stock
Exchange (BSE) and London Stock Exchange (LSE)

 

Significant events to be reported: Resolution of a litigation against the
Court of Accounts

 

Electrica informs the shareholders of the fact that, in file no. 2229/2/2017*,
the Bucharest Court of Appeal partially admitted the claim made by Electrica
and partially annulled the Resolution no. 12/27.02.2017 and the Decision no.
12/27.12.2016, issued by the Romanian Court of Accounts, regarding the
following deviations from the Decision (respectively to the correlative
measures):

-     annulled item 1 (measure II.3) - The hiring of funds in the
estimated amount of RON  224,622,940 (without VAT), for the execution of
works related to the objective "AMR system necessary for the measurement
activity and consumption dispatcher at Electrica SA level ", for which the
purchased goods, although they were highlighted in the accounting, are not
physically found in the patrimony nor were they used for the activities
carried out according to the object of activity, being necessary for the
performance of the activity of other legal entities (the company's
subsidiaries);

-     annulled item 2 (measure II.4) - The unjustified increase in the
expenses with technical assistance services in the estimated amount of RON
2,337,657.50 (without VAT), intended for carrying out the activities of other
legal entities (the distribution subsidiaries);

-     annulled item 3 (measure II.5) - Unjustified increase in operating
expenses with the amount of RON 74,667.60 (without VAT), representing
maintenance services for the equipment located in the communications
infrastructure of the subsidiaries, which are separate legal entities;

-     annulled item 4 (measure II.6) - Unjustified increase in operating
expenses with services in the estimated amount of RON 273,500 (without VAT),
for which proof of their provision for the exclusive needs of the company was
not provided, respectively with the value of 4 technical studies purchased for
activities that are not found in the object of activity of the verified
entity, being related to activities belonging to other legal entities
(electricity distribution subsidiaries), without being invoiced to the
subsidiaries for the recovery of the expense. The four studies are related to
the electricity distribution activities carried out by the electricity
distribution subsidiaries, Romanian Filialele de Distributie a Energiei
Electrica (Transilvania Sud, Muntenia Nord and Transilvania Nord), which are
organized as separate legal entities, activating in a field in which the
entity (Electrica) is not licensed by ANRE to carry out activities, nor does
it own such electricity distribution networks;

-     partially annulled item 5 (measure II.7), for the rent exceeding the
period 17 July 2013-01 September 2013, the measure being maintained for the
rent related to the period 17 July 2013-01 September 2013 - Making payments,
during July 2013 - June 2014, in the estimated amount of RON 36,385, for
expenses without a legal basis, respectively for expenses with the rent of a
building classified as company housing for the benefit of the CEO, considering
that the housing was not granted in accordance with the law;

-     annulled item 6 (measure II.8) - Unjustified increase in expenses
amounting to RON 2,400, representing land valuation services, engaged in the
same year, several times, with the same appraisor, for the same patrimonial
elements;

-     annulled item 7 (measure II.9) - Non-compliance with the legal
provisions regarding good management in the use of funds, respectively the
employment of services at overvalued prices by awarding a service contract to
an economic operator who presented a price offer higher than those of other
competitors.

 

Also, the head of claim regarding the extension of the implementation
deadlines was rejected as unfounded and it was noted that the plaintiff
reserved the right to submit a separate claim for the legal expenses incurred
in the case.

 

The file no. 2229/2/2017* on the docket of the Bucharest Court of Appeal has
as its object, mainly, the partial annulment of the Court of Accounts'
Decision no. 12/27.12.2016, issued by the director of Directorate 2 within
Department IV, respectively: regarding the irregularities found to be
Electrica's responsibility in the contested Decision, items 1 to 8, with the
consequence of removing the measures ordered in items 1, 3 to 9 inclusively;
the partial cancellation of the Court of Accounts' Resolution no.
12/27.02.2017 through which Electrica's appeal against the Court of Accounts'
Decision no. 12/27.12.2016 was rejected, respectively regarding the
irregularities and the ordered measures, and additionally the extension with
at least 12 months of the deadlines for the fulfillment of all the measures
ordered to Electrica through  Decision no. 12/27.12.2016.

 

The decision is subject to appeal, within 15 days from its communication.

 

 

Legal Squad Director

Stefania Andruhovici

 

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