Managers of privatized companies turned millionaires

The shareholders, mainly top managers in these companies, sold their stock years later to major investors, becoming instant millionaires.

most famous are in the construction field. Four individuals became rich at the Macon Deva construction material producer, following the sale of their shares to Enterprise Investors, with each earning €1.3-3.66 million. Recently, the Advent International investment fund purchased the controlling interest of brick and ceramics producer Ceramica Iasi, for some €22 million. Former and current managers each earned more than €2 million from the sale of their shares to the fund.

Laurentiu Plosceanu, head of the Romanian Association of Construction Entrepreneurs (ARACO) said it was normal for current or former directors to own large amounts of stock. “Construction companies used to have many employees (...) and share packages were very small (...) Directors bought massively [from employees] to enforce coherent policies,” he said.

“As constructions were not developing well at the time, those people took their chances and now it is time for a win,” Plosceanu said. Construction is not the only field with overnight riches, but earnings were significantly lower in other sectors. Managers who sold stock in beer and oil factories did not become millionaires, because the trend to concentrate shares in manager portfolios was not as common as in constructions.

Among companies privatized with the MEBO method, several still have shareholders waiting for the right time to sell their stock. A possible acquisition of oil producer Argus Constanta could bring as much as €2.5 million to its Manager Vasile Leu, according to the market value of shares. However, Leu said he is not expecting a foreign investor. “The oil industry is relatively stable now. The major acquisitions have taken place already,” he said.

In the energy field, Electrocontact’s Manager could earn more than €4 million if the company is sold to foreign investors. Similarly, engine parts producer Turbomecanica’s current managers could become €20 million wealthier if they sell their shares.

Riches overnight
Construction is not the only field with overnight riches, but earnings were significantly lower in other sectors. Managers who sold stock in beer and oil factories did not become millionaires, because the trend to concentrate shares in manager portfolios was not as common as in constructions.