NATIONALIZATION OF RESITA AND ITS INTERATION INTO SOVRON

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00457R014100030005-1
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 3
• Document Creation Date: December 20, 2016
• Document Release Date: March 21, 2006
• Sequence Number: 5
• Publication Date: September 30, 1952
• Content Type: REPORT

Approved For Release 2006/04/18 : CIA-RDP82-00457RO14100030005-1 ;
roue Ku
. 5ii4AA
FEQ 1952
COUNTRY
SUBJECT
CD NO.
DATE OF
INFO.
PLACE
ACQUIRED
SECRET/CONTROL m U. -0. OFFICIALS ONLY
SECURITY 1 FO~i1AoTION
INFORMATION REPORT REPORT NO.
Nationalization of Resita and its Integration
25X1
DATE D1STR. 30 September 1952
NO, OF PAGES 3
NO. OF ENCLS.
(LISTED BELOW)
SUPPLEMENT TO
REPORT NO.
DO NOT CIRCULATE
OF THE UNITED STATES, WITHIN THE MEANING OF TITLE 1B, SECTIONS 793
AND 794, OF THE U.S. CODE, AS AMENDED. ITS TRANSMISSION OR REVE-
PROHIBITED BY LAW, THE REPRODUCTION OF THIS FORM IS PROHIBITED.
25X1
25X1
THIS IS UNEVALUATED INFORMATION
1. When the Rumanian government commenced the nationalization of industrial
enterprises in June 1947, the Soviets possessed 30 percent of the
Resita capital. stock, They came into this possession from two different
sources: 18 percent was German property which they took over and 12
percent was taken from the Rumanians (Ausnit) as compensation for the
168,000 tons of scrap iron Resita bought from the German conquerors in
the USSR during the war.1 As the Soviets. had hardly profited from the
funds paid the German exploiting concern in the USSR, they felt justified
in seeking indemnification for their loss,
2. Shortly after acquiring control of 30 percent of the capital stock, the
Soviets sent Engineer Serghenco to share the management of Resita with
the Rumanian director, Carol Loncear.2 Serghenco was a very valuable
technician who specialized in matters concerning the metallurgy of iron.
He remained at Resita until August 1949.3
3. In order for Resita to be integrated into Sovrom it had first to be
nationalized, for the Soviets who desired integration, but controlled
only 30 percent of the capital stock, did not have a majority on the ad-
ministrative council, and the Rumanian majority was opposed to integration.
The Rumanian government, sympathetic to the USSR, had to acquire control
of the stock through nationalization to render the Soviet plan feasible,
and this idea was advanced at Resita during
September-October 1949.4 In January 1950 after the treaties between the
USSR and Rumania had been signed, a mixed Rumanian-Soviet commission was
created to evaluate the installations at Resita and determine the initial
CLASSIFICATION SECRET/CONTROL - U, S, OFFICIALS ONLY
Approved For Release
D I =STR I ION
25X1
25X1
25X1
 Approved For Release 2006/04/18 : CIA-RDP82-00457R014100030005-1
SECRET/CONTROL - U. S OFFICIALS ONLY
Soviet contribution.
25X1
25X1
In.the period between nationalization and integration Resita had operated
as a member of the Organization of Metallurgical Enterprises of the
Rumanian Republic. This organization, the CIS, was under the jurisdiction
of the Ministry of Industry. During this interim period the director
general of Resita was Popetz and the firm had its own management which
received instructions from CIS. Popetz was with the general management in
Bucharest while Loncear and Serghenco were directors at the factory. On
1 January 1950 Resita was released from the control of CIS and reinstated
as an independent enterprise with a representative in Bucharest. This
situation continued until 15 June 1950 when the Resita Sovrom was created
by decree.5
5. In August 1950 Serghenco was replaced by another Soviet engineer named
Iacob Simonenko who was scheduled to play a leading role in :the Rumanian
metallurgical industry.
6. In 1947 the Soviet engineer Vasiliev, former chief of Soviet deliveries
to Rumania, had been coopted for membership in the administration council
of Resita. In January 1950'he was made president of the mixed commission
(Rumanian-Soviet) which was established for the purpose.of assessing
Resita. he acted as Moscow?s confidence man and
was eventually recalled to the USSR,
25X1
25X1
7. The negotiations of the mixed. commission lasted six months. The representa-
tive of the Rumanian Government was Popetz. He was assisted, by Engineer
Alex Ioancenco, Engineer Ovidiu Micula, Engineer Mared, Engineer Marcel
Grossman, and Engineer Liteanu, all of whom were in Resitaos employ. The
Soviet representatives wished to undervalue Resitaos capital so as to
minimize the contribution they'would have to make. Different modifications
in the composition of the commission were imposed after the departure of
Vasiliev and Popetz. Ultimately, the Soviet share in the firm was not
determined by the commission, but in the course of negotiations between the
two governments. The commission continued to confer after the official
creation of Sovrom thus demonstrating that its labors were. more of a
symbolic than a real nature.
8, After the, creation of Sovrorn the Soviets were reluctant to recognize former
debts contracted by Resita, wishing to direct creditors to the former heads
of Resita or the Rumanian state. On the other hand, all the. credits of
Resita have been recognized and taken into account by Sovrommetal.
An insight into Rumanian-Soviet cooperation is afforded by the example of a
rolling mill which was taken from Resita in 1946 for importation to the USSR.
The authority,f or this removal was the reparations agreement between the
two countries. Engineer Vasiliev, who was then the director of services
and.. deliveries to the USSR, estimated the piece of equipment to be worth
350,000 dollars, which was to be paid to Resita by the Rumanian nation.
The.Resita people appraised the mill at a much higher price. Because of the
conflict, the figure was not settled on when Sovrom was created. When the
Rumanian element of the mixed commission attempted to set down the loss of
this mill in the inventory of Resita, the Soviets refused, After the
creation of Sovrom, Engini:;er Vasiliev, now director of Resita, requested
650,000 dollars from the Ministry of Finances to replace the mill.
SECRET/CONTROL - U. S. OFFICIALS ONLY
Approved For Release 2006/04/18 : CIA-RDP82-00457R014100030005-1
 Approved For Release 2006/04/18 CIA-RDP82-00457R014100030005-1.
SECRET/CONTROL - U. S. OFFICIALS ONLY
25X1
25X1
25X1
25X1
25X1
25X1
25X1
25X1
1. Comment . I the moun 25X1
o stock e Soviets took from Ausnit in compensation for the scrap
iron was 15 percent, making a total of 33 percent owned by the USSR.
2. Comment.
was technical manager.
I 1 Comment.
Serghenco 25X1
Serghenco was
25X1
replaced in April 194 by Iancu Petre Simonenco.
4.
Comment. We are advised in another report 25X1
that Resita was nationalized on 11 June 1948.
5. Comment. IResita
was e c ed from CI on January an tit-Sovromme a , em racing
Resita, was established in July 1949.
25X1 6. Comment. I Vasiliev?s return to the USSR
occurred after the creation of Sovrommetal.
SECRET/CONTROL - U. S. OFFICIALS ONLY
Approved For Release 2006/04/18 CIA-RDP82-00457R014100030005-1