Prosecutors from the National Anticorruption Directorate (DNA) have started a criminal investigation into Dan Adamescu on suspicions he siphoned off RON800mn (€180mn) from his own firm, bankrupt insurer Astra Asigurari.

The bankruptcy of Astra is a complex case involving politics, the suicide of a witness and the disappearance of some €180mn, according to prosecutors’ estimates.

DNA prosecutors said in a March 7 note that Adamescu misused the firm’s money and prevented Romania’s financial markets regulator, the ASF, from carrying out its supervisory duties.

Prosecutors restrained Adamescu’s freedom of movement for 60 days. They also set a RON40mn bond in return for not imposing tighter restrictions, such as placing him under police custody.

Adamescu is already serving a four and half year prison sentence after he was found guilty in February 2015 of bribing judges managing the insolvency of firms in his group. In the same case, Mircea Moldovan was sentenced to 22 years in jail, the harshest sentence ever given to a magistrate. Adamescu’s appeal against the court’s decision is still outstanding.

A lawyer formerly working for Adamescu, who was cooperating with the police by revealing corruption cases involving his client, committed suicide in May 2014 under circumstances that are still unclear.

Astra was the market leader in Romania’s insurance sector until two years ago. However, it was placed under special administration in February 2014 as its solvency and capital adequacy dropped below the required levels.

At the time, Adamescu accused the ASF of political bias and underlined the negative impact of the move. There were no prior warnings in regard to Astra’s insufficient reserves or suspected undervaluation of expenditures, Adamescu told an ad-hoc press conference. He also claimed that Astra had already asked for ASF’s permission for a capital increase, but had not received the green light from the regulator.

On June 30, 2015, Astra's available solvency margin registered a negative value of approximately RON871mn, a liquidity ratio of 0.03 and capital needs of approximately RON 968mn, ASF announced in a press release.

An attempted RON425mn capital increase - a key element of the company’s recovery plan - failed in August 2015. Astra’s former court-appointed manager KPMG said the failure was due to a lack of investors. Company shareholders contributed only RON134,000 in the first two stages of the capital increase operated under the management of KPMG, Ziarul Financiar daily reported.

However, ASF president Misu Negritoiu said the capital increase failed because of the owner's greed. Several investors had been interested, Negritoiu said, mentioning Ergo of Germany, Fosum Group of Portugal and PZU of Poland.
 
A Bucharest court endorsed the bankruptcy of insurer Astra Asigurari last November, despite a last ditch attempt by Adamescu to convince the court that he had financing lined up for Astra. The insurer is currently under the management of the insurance market guarantee fund, which is supposed to service customers' claims.

Total compensation to be paid to Astra's policyholders is estimated at RON700mn, and it is not clear how much of this can be recovered from Astra's reserves.
 
Astra was controlled by Adamescu through Dutch-registered TNG Nova Investments BV (TNGBV).

One of Romania’s most high-profile businessmen, Adamescu’s holdings spanned real estate and the media as well as insurance.

Adamescu moved to Germany in the early 1980s under unclear circumstances, after working for a chain of shops patronised by high-ranking Romanian officials. Before the collapse of communism in 1990, he developed an electronics distribution network in the communist countries. Rumours about his membership of the former communist intelligence services, which have produced a large number of successful businessmen in Romania, have never been confirmed.

In addition to Astra, which was acquired through a controversial privatisation, Adamescu’s holdings included Unirea Shopping Centre in Bucharest and Romania Libera daily. More recently he acquired Otelul Galati football club (which has since gone bankrupt) and Rex hotel in the seaside resort of Mamaia (which burned down).

The Astra case was highly politicised, since Romania Libera was seen as a supporter of former president Traian Basescu, whose second and final term ended in November 2014. In 2014 and 2015, Basescu openly criticised the steps taken by the ASF, particularly its then president Dan Rusanu, who is also an influential politician.

Adamescu claimed to have been victimised by the ruling Social Democratic Party (PSD), because of the centre-right orientation of his influential daily. In order to demonstrate the political aspect of the case, in September 2015 the law firm hired by Adamescu cited statements by Romania’s then prime minister Victor Ponta publicly commenting on the political bias of Romania Libera. Furthermore, the law firm claims that the bankruptcy procedures started against Medien Holding, owner of Romania Libera and also controlled by TNGBV, are politically-driven.