Romania’s electricity producer Hidroelectrica (BVB ticker: SNN) announced on Tuesday at the Bucharest Stock Exchange that, in the September 22, 2025 meeting, the Supervisory Board decided to initiate the selection process and appoint two new members of the Directorate after CEO Karoly Borbely and CFO Marian Fetița concluded their mandates.
“Selection will be conducted by an independent expert specialized in human resources recruitment, whose services are contracted in accordance with the law. To ensure transparency, Hidroelectrica will publish on its website information regarding the stages of the process, selection criteria, and final results, in compliance with legal requirements, so that interested parties have easy and non-discriminatory access to all relevant data,” the report submitted to the BVB stated.
Reason for the Leadership Changes
The CEO and CFO stepped down to allow Romania to meet the conditions of the National Recovery and Resilience Plan (PNRR) regarding the proper selection of corporate leaders in state-owned companies. Failure to comply with these rules could cost Romania up to €300 million. Economedia has already highlighted similar issues in other state-owned enterprises.
The decision comes in the context of Romania’s obligations under Milestone 121 in Component 6 – Energy of the PNRR, as well as European Commission Decision C(2025) 3490 of May 28, 2025, which partially suspended payments with a six-month deadline for addressing issues related to the milestone. The Ministry of Energy, via a September 18, 2025 letter, requested the rapid implementation of measures to correct the deficiencies identified by the European Commission regarding Hidroelectrica’s Directorate.
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Statements from CEO Karoly Borbely
Karoly Borbely announced his decision on LinkedIn before Hidroelectrica officially published it, in line with regulations for listed companies:
“Following today’s Supervisory Board meeting, I have amicably decided to terminate my mandate. The achievements of the past two years show that managerial performance is possible in a state-owned company listed on the capital market, despite specific challenges. The conclusions of the independent auditor KPMG, commissioned by the Supervisory Board regarding potential conflicts of interest, indicate that there is sufficient evidence in the procedure clearly defining this situation. In the Ministry of Energy’s report regarding Milestone 121 and in letters sent to the Commission, it is stated clearly and explicitly that the selection process was transparent, fair, and respected all stages and principles of corporate governance and the BVB Code of Best Practices. For Romania, it is essential that decisions regarding the leadership of listed companies are taken responsibly and in compliance with the law to avoid affecting the company’s stability and market value. My priority is to help prevent any penalty for Romania (€16 million) and support actions that minimize the risk of a decrease in H2O’s share price and the company’s market value.”
Strategic Role of Hidroelectrica
Hidroelectrica is one of eight state-owned energy companies where the European Commission identified conflicts of interest and unjustified political influence in board member selection. These irregularities risk blocking €300 million in PNRR funds.
The company is Romania’s largest energy producer and provides technological services for the National Energy System. Hidroelectrica operates 188 hydroelectric plants with a total capacity of 6.3 GW and a wind farm at Crucea with an installed capacity of 108 MW. According to the December 2024 ANRE report, the company holds a 14.66% share in the competitive electricity supply market.
Photo: freepik.com
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