Moldova’s State-Owned Companies Generate Just 1.38% in Returns

The return on the state’s portfolio from dividends and allocations is just 1.38 per cent

The state manages a portfolio of enterprises with equity capital of approximately 38 billion lei, yet the return from dividends and distributions is only 1.38 per cent. If the three joint-stock companies paying the highest dividends are excluded, the return falls to 0.38 per cent. The figures were presented by Prime Minister Vasile Tofan, who also announced a review of management and remuneration policies in state-owned enterprises.

Vasile Tofan

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“As a businessperson, I can tell you that I would never have invested in a company with a yield of 1.38 per cent. If we exclude the three public limited companies that pay the highest dividends, the overall yield falls to 0.38 per cent. That is far too little. It does not mean that everything should be sold off. Some assets are strategic, but it does mean that they must be managed professionally and that the state must know why it holds each asset and what return it expects from it,” said the Prime Minister.

Tofan pointed out that the authorities have begun to rectify remuneration practices deemed excessive. Around 100 of the largest remuneration packages have been reviewed, including fixed salaries, bonuses, allowances, benefits and profit-sharing payments. Pending the completion of the assessment, the Public Property Agency (APP) has suspended the awarding of new discretionary bonuses, incentives and allowances in state-owned enterprises.

“We are not embarking on a salary hunt. We must not target the salaries of engineers and cyber security specialists who are needed to defend our state – people we need to attract from the private sector – nor other skilled professionals we need to recruit into the public sector. The state must pay its professionals fairly, but every high salary paid from public funds must be justifiable on the basis of responsibility, competence and results,” emphasised Vasile Tofan.

This story was translated with the assistance of artificial intelligence.The translation was also reviewed by the Logos Press editorial team.

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