Head of PZU Zycie sacked
The government and Powszechny Zaklad Ubezpieczen (PZU) (http://www.pzu.pl) shareholders cleared one more hurdle on the way to the insurance company's initial public offering (IPO) when they sacked the head of the company's life insurance and pension-fund subsidiaries.
Grzegorz Wieczerzak and two of his lieutenants were ousted late last month from PZU Zycie's management board during an extraordinary general shareholders meeting called by the Insurance Supervisory Office (PUNU) (http://www.punu.gov.pl). Last week Wieczerzak was sent packing from PZU's pension fund and building management companies.
"It's a major change," Zygmunt Kostkiewicz, PZU's president, told the Business Journal regarding Wieczerzak's removal. "The company will now operate as one group and not as very distant companies whose actions were very contradictory in many cases."
The new management brings Poland's dominant life-insurance company under the control of its parent firm, PZU, and its strategic partner, Netherlands-based Eureko (http://www.eureko.com). Wieczerzak, PZU Zycie's head since 1998, had worked against Eureko, which together with Big Bank Gdanski (Big BG) holds a 30% stake in PZU and is set to take a majority position during an IPO thanks to an agreement reached with the treasury in early April.
With the new management in place, PZU will focus on internal management and the upcoming IPO, Kostkiewicz said. The treasury, Eureko and PZU are planning to complete the IPO this year, he said.
"The ministry and the shareholders are planning to start the book building in October and to take the group public in December," he said. "The shareholders signed an agreement on April 3 in which they committed themselves to making every possible effort to meet those deadlines and so far they have been doing it."
Treasury Minister Aldona Kamela-Sowinska had said she would not sign off on the company's IPO prospectus until everything is settled within the insurance group, and a cleaned-up personnel situation was part of that requirement. She ultimately turned to PUNU to call a meeting because Wieczerzak had blocked other means.
"PUNU has the right to call an extraordinary general shareholders meeting if it sees irregularities," said Dorota Habich, spokeswoman for PUNU. The regulatory agency rested its claim on an insufficient number of appointments to PZU Zycie's supervisory board and on the company's failure to appoint an auditor, she said.
The Pension Fund Supervisory Office (UNFE) must still approve the changes at the pension fund, Powszechne Towarzystwo Emerytalne PZU (PTE PZU). When that is complete, Wieczerzak's role at the company will officially be over, a PZU official said.
"From my information Mr. Grzegorz Wieczerzak was totally removed from any official duties of the business group," said Adam Taukert, spokesman for PZU. Further personnel changes are possible but no additional information was available, he said.
Krzysztof Mastalerz, former director for capital investment at PZU, was named the new president of PZU Zycie.
Kamela-Sowinska said she plans to float the company, possibly on the London Stock Exchange, this year, but that she cannot commit to a date.
PZU is the dominant insurance firm in Poland, controlling more than half the market in life insurance and personal and property insurance. The treasury still holds a dominant position on the company's management board, but the state's role will diminish as the privatization process moves forward through the IPO.
Eureko's position as strategic investor in the company it acquired its stake in November 1999 for zl. 3 billion ($769 million) had been hampered prior to Kamela-Sowinska's appointment as head of the treasury. Her predecessor kicked Eureko's representatives out of PZU's management structure in November 2000 and tried to roll back the privatization agreement with the company.
Eureko's management saw Wieczerzak as part of the problem. One day before the government and Eureko signed their privatization deal, he and another PZU executive had signed a secret agreement with Deutsche Bank promising to sell PZU's stake in Big BG to the German financial institution, Eureko said. In January 2000 they used the Big BG shares controlled by the PZU group to support Deutsche Bank's efforts to take over Big BG. Eureko was adamantly opposed to any role for Deutsche Bank.
Despite Eureko's protests, Wieczerzak was never removed from management.
