TPSA flexes, Centertel chief suspended

The decision, effective Sept. 5 but made public just last week, was taken by Centertel's supervisory board chairman Marek Konarski, who said it was based only on dissatisfaction with the current operations of the company.
"We have to analyze if certain occurrences actually took place, and if so, who is responsible," Konarski said.
Konarski would not specify those activities.
Earlier statements made by Telekomunikacja Polska SA (TPSA) officials suggest that the suspension was part of an effort to renegotiate the original contract to give majority shareholder TPSA more control over Centertel. In return, minority shareholders France Telecom and Ameritech might be released from a clause that could deny them the chance to take part in the tender for the second generation Global Systems Mobile (GSM) license.
"This whole thing was triggered by TPSA - they've complained many times to parliamentary committee about the structuring of the company," said telecom consultant Lech Zdziech, formerly with TPSA predecessor Polska Poczta i Telekomunikacja (PPT). "And in my opinion, behind that is standing the GSM license."
A little over a week before the suspension, TPSA Board Chairman Jacek Gadomski presented his blunt opinion on Centertel's operations to the Sejm's Committee on Transportation and Communications. In his testimony, he charged Centertel's board with mismanagement, inefficiency and technical blunders when projecting Poland's analog NMT (Nordic Mobile Telecommunications) system. He also said that despite TPSA's position as majority shareholder, it has no real say in the operation of the company.
Under the current arrangement, TPSA has a 51% stake, with France Telecom and U.S. Ameritech each holding 24.5% of the company. But appointment of management board members was set on a basis of equality, with Ameritech choosing the general director and marketing director, France Telecom appointing the financial officer and technical director, and TPSA in charge of administration and press relations.
"All basic, key decisions - technical and financial - are made without the participation of Telekomunikacja Polska SA and made outside the borders of Poland. Those are the facts," Gadomski told the committee. "We have been claiming for a long time that Centertel is poorly managed. That is why we have made the condition that the structure of the board should be 3:3, and the head of Centertel must be a representative of TPSA."
On financial matters, Gadomski complained that a credit arrangement with the European Bank for Reconstruction and Development kept TPSA from collecting its share of 1994 net profits, or about $10 million. "As it turned out, our western partners, without consulting Telekomunikacja Polska SA, signed a credit agreement with the EBRD, whereby the EBRD has to agree to dividend payments. In other words, Polish law is subjugated to the decision of some official from the EBRD," Gadomski said. TPSA itself does not pay dividends to the State Treasury. Last year the company showed a net profit of zl. 664 million ($285 million).
The Chairman of the Sejm committee Andrzej Szarawarski pointed to then-Communication Minister Jerzy Slezak as the culprit for allowing an agreement which he said was concluded in bad faith against the interests of Poland.
Slezak, who is currently chairman of TPSA's supervisory board, said the charges leveled against him were totally unfounded.
"The agreement is wholly in accordance with Polish law and the commercial code - this wasn't some kind of anomaly as they say. Period," Slezak said. "This is a normal agreement that you see signed in other countries all over the world."
Slezak said the reason minority shareholders were given charge over key positions was because they were putting up the cash for the entire undertaking. "Of course the financial arrangements have something to do with the management structure," he said. "After all, France Telecom and Ameritech paid over $30 million each to TPSA for the concession."
This comes back to Ameritech and France Telecom's original intent in agreeing to develop the more outdated NMT system.
When the two won the tender to develop the system, Slezak issued a letter of intent which said they would receive one of the two GSM licenses without the requirement to bid. But current Communications Minister Andrzej Zielinski reneged on that promise, saying that laws introduced since that time (Law on Public Procurements) forbid granting a concession without a competitive tender.
Hence, Ameritech and France Telecom have sunk around $300 million into a system which they thought would guarantee them a license to operate a more advanced and profitable GSM system.
Now no one knows if they will be able to bid on that system competitively because of a clause in the original contract with TPSA, which dictates that none of the partners can bid for any other licenses without the other partners.
Although TPSA has not yet announced officially if it will take part in the GSM tender or not, Centertel's Supervisory Board Chairman Konarski said that the tender regulations exclude Centertel and TPSA from bidding. This would, in turn, exclude Ameritech and France Telecom, unless they can come to an agreement on changing the original contract.
"We realize that neither France Telecom nor Ameritech can accept the way things are now, and that they are going to look for ways to get into another arrangement, another consortium," Gadomski said. "To achieve that, they'll have to be freed from that clause - and we definitely won't do that for free."
"It would be difficult to imagine a situation where we would sit down at the table with our partners and say - give over what you've got to us. Nobody would do that," Gadomski explained. "There has to be a defined situation where they will be forced to do that."