RESOLUTION

COMMISSION
FOR BANKING
SUPERVISION
00-919 Warsaw
ul. Świętokrzyska 1/21
Tel. (22) 826 99 55
Fax (22) 826 37 51
Chairman
Warsaw, 8 March 2006
RESOLUTION
Pursuant to Art. 27 § 1 in relation to Art. 24 § 3 of the Act of 14 June 1960 on the Code of
Administrative Procedure (further called: CAP – Journal of Laws No. 98/2000, item 1071;
No. 49/2001, item. 509; No. 113/2002, item 984; No. 153/2002, item 1271; No. 169/2002,
item 1387; No. 130/2003, item 1188; No. 170/2003, item 1660; No. 162/2004, item 1692; No.
64/2005, item 565; No. 78/2005, item 682 and No. 181/2005, item 1524)
Chairman of the Commission for Banking Supervision – having considered the motion
submitted by UniCredito Italiono S.p.A. on 6 March 2006 for the exclusion of Mr. Cezary
Mech, a Member of the Commission for Banking Supervision, from participating in the
proceedings concerning the application by UniCredito of 29.07.2005 requesting the CBS for
the approval to exercise voting rights at the General Meetings of the following banks: BPH
SA, BPH Bank Hipoteczny SA and Bank Rozwoju Energetyki i Ochrony Środowiska SA
Megabank (in liquidation)
resolves
to exclude Mr. Cezary Mech, Deputy Chairman of the Commission for Banking
Supervision, Undersecretary of State in the Ministry of Finance, from participating in
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the proceedings of the Commission for Banking Supervision concerning the application
by UniCredito of 29 July 2005 requesting the CBS to issue approval for exercising voting
rights at the General Meetings of the following banks: BPH SA, BPH Bank Hipoteczny
SA and Bank Rozwoju Energetyki i Ochrony Środowiska SA Megabank (in liquidation)
Statement of grounds
1) On 6 March 2006, UniCredito Italiano S.p.A. submitted a motion to Mr. Leszek
Balcerowicz, Chairman of the Commission for Banking Supervision, requesting him to
exclude the Member of the Commission for Banking Supervision, Mr. Cezary Mech, from the
proceedings concerning the application of UniCredito of 29 July 2005 requesting the CBS to
grant approval to exercise voting rights at the General Meetings of the following banks: BPH
SA, BPH Bank Hipoteczny SA and Bank Rozwoju Energetyki i Ochrony Środowiska SA
Megabank (in liquidation).
The mover refers to the press publications reporting Mr. Mech’s comments on the possibility
of the Commission granting the applicant the approval to exercise voting rights on its shares
of BPH SA and also the approval for the merger of this bank with Polska Kasa Opieki SA.
The mover refers to the statements included in the following press publications:
EURO PAP, Europejski Serwis Polskiej Agencji Prasowej [European Service of the Polish
Press Agency] 21 January 2006, after "The Economist" of 19 January 2006, Michał Zieliński:
Pokerowy Brydż [Poker Bridge], "Wprost" (weekly), no. 1207 of 29 January 2006, Marzanna
Stychlerz-Kłucińska: Bankowe przeciąganie liny [Banking tug-of-war], “Solidarność”
(weekly) no. 6 (907) of 10 February 2006, Halina Kochalska: Fuzja czy sprzedaż? [Merger or
sales], “Parkiet” of 17-18 December 2005, no. 245, page 3, “Money.pl” Cezary Mech: Fuzja
Pekao z BPH nie byłaby korzystna dla rynku [Cezary Mech: Merger of Pekao and BPH would
not be beneficial for the market], 13 December 2005, after the Polish Press Agency, Eliza
Więcław:
Włosi
przyjmują
polskie
warunki
[Italians
accept
Polish
conditions,
"Rzeczpospolita" of 22 December 2005, no. 298, page 1, Jan Piński, Krzysztof Trębski,
Rzeźnik z Warszawy? [Butcher from Warsaw] “Wprost” (weekly) no. 1209, 12 February
2006, Dariusz Steczkowski, Kamil Pawłowski, Policjant w polskich finansach [Policeman in
Polish finance], “Ozon” (weekly) no. 9/06, 2 March 2006, Beata Tomaszkiewicz, Nadzór
weźmie pod uwagę wątpliwości [Supervision will take doubts into account], “Puls Biznesu”, 3
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January 2006, no. 2 page 6, Baca chce być górą [Senior shepherd wants to have the upper
hand] “Parkiet”, 14 December 2005, no. 242 page 3
According to the mover, these press releases prove that Mr. Cezary Mech had publicly stated
that the Commission for Banking Supervision would refuse to take into account the
application submitted by UniCredito, even before the CBS could analyse the final materials.
2) While assessing the legitimacy of the submitted motion, it should be stated that:
Art. 27 § 1 of the CAP specifies that “a member of the collective body is subject to exclusion
in cases defined in Art. 24 § 1. The resolution to exclude such member in the cases specified
in Art. 24 § 3 is taken by the chairman of the collective body or of a body superior to the
collective body at the request of a Party, member of the collective body or ex officio”.
In turn, pursuant to Art. 24 § 3 “The employee’s direct superior is obliged to exclude the
employee from the proceedings, at the employee’s own request, at the request of a Party or ex
officio, if there exist substantiated circumstances other than those specified in § 1 which may
raise doubts with regard to the employee’s impartiality.”
The institution of the exclusion of a member of a collective body from participation in the
proceedings is the strongest guarantee of the principle of impartiality of public administration
authorities and belongs to procedural institutions which are used, first of all, to implement the
principle of the pursuit of objective truth in line with Art. 7 of the CAP and the principle of
deepening citizens’ trust in public authorities in line with Art. 8 of the CAP.
The reasons for the exclusion of an employee and a member of a collective body are listed in
Art. 24 § 1 and 2 of the CAP. The circumstances of exclusion are enumerated in this
provision, and thus they represent obligatory premises for exclusion. The provision of Art. 24
§ 3 of the CAP imposes the legal obligation to apply the institution of exclusion also in cases
other than those specified in Art. 24 § 1 of the CAP in the situation when it has been
substantiated that there exist circumstances which may give rise to doubts with regard to the
employee's impartiality.
If it has been substantiated that the conduct of a public officer could give rise to doubts of a
Party as regards such officer’s impartiality, then his/her exclusion from the proceedings is
consistent with the fundamental principles of justice and helps to build the public image of the
administrative authority as composed of objective and impartial officers.
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In Art. 24 § 3 of the CAP the legislator uses the word “substantiate”, which means that a
lower degree of probability than evidence is sufficient here, which does give such certainty as
evidence as regards impartiality of the excluded person. Substantiation replaces evidential
proceedings which would have to be carried out in case of doubts concerning impartiality. In
principle, evidence is understood as substantiated if an administrative body accepts it as
reliable without the need to conduct additional evidential proceedings. According to expert
literature this may refer to private life, professional career, additional occupation, political or
social activity and publicly expressed or demonstrated views and beliefs.
(B. Adamiak, J. Borkowski (2000), Code of Administrative Procedure. Comments. Warsaw,
p. 163; R. Kędziora (2005) Code of Administrative Procedure, Comments. Warsaw, p. 96)
The term “impartiality” is not directly defined in legal regulations. It its current proceedings,
the Commission for the Banking Supervision can, by analogy, apply the existing procedure
connected with impartiality of the judge. The Judgment of the Constitutional Tribunal of 27
January 1999 (ref. no. K 1/98) on the analysis of premises for excluding the judge states that
“Partiality is a state of mind which can be manifested to a lesser or larger degree. Thus, the
threats to the judge’s impartiality can only be objectivised to a limited extent. Partiality may
have various reasons which cannot be fully defined, insofar as the human nature always
makes every person, more or less consciously, partial in different situations. Notwithstanding
that, the main question is whether there actually occur real situations when the threat to the
judge’s impartiality can be asserted with a high degree of substantiation and, at the same time,
manifest themselves to such a degree that they can be objectivised."
The Supreme Court, in the Resolution of 7 November 1984, II CZ 117/84, expressed the
opinion that the “basis for excluding the judge and a member of a collective body, in view of
the doubts as to his/her impartiality, can be his/her reluctant approach to a Party and entities
acting on behalf of the Party manifested in the course of the proceedings.”
It should be stated that regulations assuring the exclusion of a member of a collective body
from participating in the proceedings must be referred to the state of public awareness and
therefore also to expectations and concerns of society through which the collective body, i.e.
the Commission for Banking Supervision, is perceived.
Members of the Commission for Banking Supervision must both have the sense of their
impartiality but also must guarantee that there will be no justified doubts as to their
impartiality. From the point of view of the public image of the CBS as a body observing the
law, these latter, external guarantees of impartiality are more important.
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3) The analysis of the press releases enclosed by UniCredito Italiano S.p.A. quoting Mr.
Cezary Mech’s comments on banks PKO and BPH reveals that this Member of the
Commission is going to vote against UniCredito’s application for the CBS to approve the
exercise of its voting rights.
Even though Mr. Cezary Mech claims that he did not approve these press releases before
publication, still, they could have produced the above described impression in the public
opinion.
It should also be emphasised that Mr. Cezary Mech did not take the opportunity to request
corrections to be published, under Art. 31 of the Press Law.
Other press releases not indicated in UniCredito’s motion, i.e. Reuters of 13 December 2005
“Fuzja Pekao z BPH nie byłaby korzystna dla rynku – Mech” [Merger of Pekao SA and BPH
would not be favourable for the market – says Mech], Reuters of 16 December 2005 –
[Wywiad – Mech liczy, że UniCredito sprzeda BPH lub Pekao S.A." [Interview – Mech hopes
that UniCredito will sell either BPH or Pekao SA], the Polish Press Agency of 17 January
2006 “KNB w sprawie UniCredit i BPH weźmie pod uwagę m.in. stanowisko MSP – Mech”
[With regard to UniCredito and BPH, CBS will consider, inter alia, the stance of the Treasury
Ministry – says Mech] – also prove that Mr. Cezary Mech presented his views to the press
agencies, expressing his critical opinion on the issue which was the subject of the CBS’s
administrative proceedings.
On one occasion – the Polish Press Agency of 17 January 2006 “KNB w sprawie UniCredit i
BPH weźmie pod uwagę m.in. stanowisko MSP – Mech” [With regard to UniCredito and
BPH, CBS will consider, inter alia, the stance of the Treasury Ministry – Mech] - he spoke on
behalf of the Commission for Banking Supervision claiming that the CBS "... will
undoubtedly take the stance of the Ministry of the Treasury into consideration.”
In addition, based on the knowledge of the Chairman of the Commission for Banking
Supervision, the opinion of Mr. Cezary Mech presented at the CBS’s meeting on 7 December
2005 concerning UniCredito’s motion was not impartial (evidence: “restricted” Appendix to
the present Resolution).
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Moreover, it has to be highlighted that the statements constituting the grounds for the
exclusion had been made before the evidential proceedings were concluded. According to the
information provided by UniCredito to the General Inspectorate of Banking Supervision
(GINB), due to a long time needed for the preparation of testimony and gathering documents,
the whole body of evidence was to be submitted to GINB at the beginning of February 2006
and only then was it possible to perform full assessment of its merits against the premises
specified in Art. 25 point 7 of the Banking Act.
4) In conclusion, the existence of premises specified in Art. 24 § 3 of the CAP justifying the
exclusion of Mr. Cezary Mech, Member of the Commission for Banking Supervision, from
participating in the proceedings run on the motion by UniCredito dated 29.07.2005 for issuing
CBS’s approval to exercise the right of vote at the General Meetings of the following banks:
BPH SA, BPH Bank Hipoteczny SA and Bank Rozwoju Energetyki i Ochrony Środowiska
SA Megabank (in liquidation) should be recognised as substantiated.
Instruction:
Pursuant to Art. 141 § 1 and Art. 142 of the CAP, no complaint shall be submitted with regard
to this Resolution and the Party can only challenge it by appealing against the Decision.
Chairman
[signed]
of the Commission for Banking Supervision
CC:
1) UniCredito
2) Members of the Commission for Banking Supervision
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