“Decision to open accounts in banks is taken only by manager, regardless of company’s form of ownership” - Info-Prim Neo interview with economic analyst Mihai Manoli, ex-finance minister

[Info-Prim Neo:] Mister Manoli, the salaries of the managers of a number of state-run companies or companies in which the state owns holdings is now at issue. In a Government meeting, the Ministry of Economy was entrusted with the task of performing a relevant analysis. How should these discussions be interpreted at a time when most of the people receive low salaries and pensions, and what results they can produce? [Mihai Manoli:] I’d recommend separating these discussions from the political elements. They should not be aimed at gaining image advantages for some of the parties and their leaders. I should mention that the given discussions ignore the law on entrepreneurship and enterprises, which says that the state can create companies at central and local levels, but does not have the right to get involved in the operational activity of the company if its administration is entrusted to the chief manager. When we say that a state-run company for example opened accounts in another bank than in the one preferred by the state, we should know that a relevant decision is taken only by the manager of the given company, who was empowered by the state to administer its property. The same happens when the state is the main shareholder in a joint stock company. The state has the same rights as the other shareholders. We should be attentive when making related statements… As to the salaries, the information about the pay of the managers of the given companies is confidential and should not become a subject for public debates. [Info-Prim Neo:] How can we assess the performance of these companies in this case as not all of them are successful enough compared with similar companies from the region and the post-Soviet area? Why should the manager of such a company have a salary that is 10-15 times higher than the average pay in the economy? [Mihai Manoli:] The state, as owner or main shareholder of a company, signs a contract with the manager, entrusting him with the task of administering the company. If the manager does not fulfill the clauses of the contract or does not obey the legislation and commits abuses, the state can terminate the contract with him. Besides, the manager’s work is and should be monitored by the company’s Board or other executive bodies. They assess the performance of the manager and can penalize him, including decrease his salary. If the manager does not agree, he can ask the court to pronounce. [Info-Prim Neo:] However, in a poor country like ours, when the ordinary people hear that a company manager receives a monthly salary larger than their yearly pay, the surprise is great… [Mihai Manoli:] Why should we believe that the minister’s salary must be high? In the civilized countries, the ministers serve for the state for three-four years and then set up businesses and make money. On the other hand, the salaries are not set by the managers, but by the general assemblies of shareholders and the companies’ Boards, in accordance with the expenditure policy approved by them. [Info-Prim Neo:] Have you witnessed cases when the manager of a state company was dismissed for nonprofessional work and poor results when you worked as a minister and afterward? [Mihai Manoli:] Contracts have been terminated, including at Banca de Economiii (BEM), but I do not remember cases when the manager was dismissed for such reasons… [Info-Prim Neo:] They permanently speak about the unsatisfactory management of the companies that are fully or partly owned by the state. It is said that this is the reason why the companies are being privatized or passed under private ownership according to other methods. But what can you say about the accounts at Banca de Economii that were closed by state-owned companies or companies in which the state owns major holdings? [Mihai Manoli:] I already said that not the state, but the managers decide what bank to open accounts with, either state or private. The manager takes the decision after analyzing the costs incurred and chooses the bank where the costs are lower. If BEM charges 100,000 lei while other banks only 70,000 lei for the same service, the manager will chose a private bank. [Info-Prim Neo:] It is yet strange that many companies that were reliable clients of BEM transferred their accounts to Victoriabank at once. [Mihai Manoli:] I don’t know what parties the management of the companies that closed their accounts at BEM support. I did not see the list of these companies. They say that Moldtelecom’s decision was influenced by the Democratic Party, but the company’s administration includes persons from other parties as well. I know nothing about SA Termocom’s decision. [Info-Prim Neo:] But BEM is a good bank, why should they prefer other banks? [Mihai Manoli:] Yes, BEM is one of the best banks in Moldova. The results achieved by it last year are good and the governor of the National Bank confirmed this. But we should not forget that two years ago BEM was obliged to return 600 million lei to the persons who deposited money in the insolvent Investprivatbank. This decision will affect the bank, including its range of products and the prices of services.