Romania: An Offshore Maze

Romania’s internet ownership includes controversial businessmen and politically connected figures. In many cases, the ownership is not clear because it is lost in a maze of offshore companies.

Romania’s wireless and cable telecommunications market has 1,244 authorized providers of electronic communications services and networks, according to a list provided by the National Authority for Management and Regulation in Communications (ANCOM).

Most providers are locally owned companies that supply small-scale communications services and network access to businesses or residential customers in limited geographic areas.

These providers share transparent and easily traceable ownership structures, unlike larger organizations. Reporters for RISE/OCCRP focused on the major providers of cable and wireless (satellite) Internet and TV retransmission services across the country, as identified by the most recent ANCOM fixed and mobile communications access reports: RCS-RDS, Telekom (Cosmote/Romtelecom), Orange, Vodafone, AKTA, UPC, Nextgen, MediaSat, and 2K Telecom.

‘Outsourced’ Ownership

The structures of the largest internet service providers (ISP) are dominated by offshore companies, proxy owners, company registration agents acting as owners or directors and other complex ownership structures. The most popular offshore and tax havens for major Romanian ISP players are the Netherlands and Cyprus, with Luxembourg, the US state of Delaware, the British Virgin Islands and Cayman Islands also favorites.

RCS-RDS, the largest ISP on the market according to ANCOM, is controlled by Zoltan Teszari, an enigmatic Romanian businessman from Oradea whose ability to evade scrutiny earned him the nickname “the anonymous billionaire”.

Teszari seems to own only 1.84 percent of shares in RCS-RDS SA in Romania, but he controls 57.87 percent of RCS’s majority shareholder, Cable Communications Systems NV, which is registered in the Netherlands via RCS Management SA.

Teszari also owns 58.91 percent of shares at RCS Management, making him a significant actor in Romania’s biggest ISP. RISE/OCCRP’s investigation found that RCS-RDS’s network of ownership and connections counts 30 offshore companies spread across the Netherlands, Cyprus, Luxembourg, the British Virgin Islands and Cayman Islands. Its links also reach the global investment fund Everest Trust controlled by billionaire Alan Grant Quasha.

Criminal investigations

Accusations of fraud, bribery, provision of false documents, illegal appropriation of state lands and mismanagement of public funds have landed some of the shareholders, employees or business partners of these ISPs in court in criminal investigations.

In one instance, AKTA’s 12.87 percent shareholder, Girexim Universal SA, is involved in a criminal case on fraud and mismanagement of public funds. In early November 2014, prosecutors requested the arrest of Tudor Pendiuc, the mayor of the Romanian city of Pitesti and of businessmen Valentin Visoiu, Constantin Scarlat and Gheorghe Vasii based on corruption allegations including contract fraud and mismanagement of a local public transportation contract managed by a consortium including Girexim Universal SA, AKTA’s shareholder.

Vasii, the former president of Girexim and a minority shareholder of AKTA SRL and of Digital Cable Systems SRL (DCS) – owner of the AKTA brand — is also accused of complicity to abuse office with serious consequences and repeated acts. The trial is ongoing and Vasii’s shares at AKTA and DCS have been seized.

Political connections

Direct or indirect political connections have been identified in a few instances. UPC’s general director Robert Redeleanu served as advisor to the Minister of Economy, Lucian Bode in 2012, before being assigned his current position at UPC.

Radu Puchiu, a State Secretary since February 2013, was assigned by the Ministry of Information Society to the administrative council of Telekom Romania in February 2015.

Laura Ranca

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