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(Alliance News) - Plaza Centers NV on Thursday said the Romanian prosecutor has closed an investigation into the Casa Radio project in Romania.
In 2006, Plaza acquired a 75% interest in a company which is under a public–private partnership agreement with the government of Romania. Following the acquisition, Plaza agreed to develop the Casa Radio site in Bucharest.
As a result, Plaza Centers holds indirectly 75% of the shares in the Casa Radio projects, with the remaining 25% held by the Romanian authorities and a third party undisclosed private investor.
As part of the agreement, the project was granted development and exploitation rights for a period of 49 years, starting December 2006. As part of its obligations, the project partners have committed to construct a public authority building for the Romanian government at its own cost.
Large scale demolition, design and foundation works, financed by loans given by Plaza, were performed on the construction site until 2010, when construction and development was put on hold due to a lack of progress in the renegotiation of the agreement with the authorities and the global financial crisis. These circumstances caused the project not to meet the development timeline, Plaza explained.
The company said it obtained the detailed urban plan related to this project in September 2012.
Plaza was required to submit a request for building permits within 60 days from the approval date of the detailed urban plan and commence development of its project within 60 days after obtaining building permit. The building permits have not been obtained.
The Netherlands-based property developer on Thursday said the Romanian prosecutor found no evidence to indicate any bribery offence was committed in relation to the project.
The prosecutor also decided no money laundering occurred, and evidence regarding a potential traffic of influence is considered a matter for civil litigation and not a criminal offence.
Plaza said both parties may file an appeal within 20 days from receiving the decision.
The stock closed flat on Thursday in London at 27.50 pence a share.
By Evelina Grecenko; evelinagrecenko@alliancenews.com
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