EDP and REN directors in corruption investigation

 In Companies, News

Top brass directors, past and present, at Portugal’s electricity giant EDP (Energias de Portugal) are under investigation for suspected corruption.

So far in Operation Cyclone there are nine official suspects or ‘arguidos’ who are: Miguel Barreto Caldeira Antunes, former Economy Minister Manuel Pinho, EDP CEO António Mexia, EDP Administrator and President of EDP Renewables, João Manso Neto, João Conceição (REN Administrator and President of REN), Rui Cartaxo, ex-president of REN, Pedro Furtardo (REN board member), Pedro Rezende and Jorge Ribeirinho Machado (former EDP directors).
The suspicions have even fallen on its CEO António Mexia after Judicial Police searched EDP offices and those of grid operator REN and the local division of the Boston Consulting Group.
The Public prosecutor said in a statement that the investigation was linked to hundreds of millions of euros in state compensation paid to former monopoly for giving up some long-term power-purchases as part of the liberalisation of the power sector that began in 2004 reports Reuters.
A spokesman for the prosecutor said Mexia, who has run Portugal’s largest company since 2006, was a suspect in the case, João Manso Neto, who heads EDP’s renewables division, was also a suspect, she said.
Two directors at REN, João Conceição and Pedro Furtado were also named as suspects by the prosector’s office.
EDP said in a statement that investigators who searched its offices were given “unrestricted access to all information and all collaboration was given with a view to clarifying the facts.”
The prosecutor’s office said in a second statement that it had collected a large amount of documentation.
“The investigation continues into what could be facts that are suspected of representing the crimes of active and passive corruption,” the statement said.
On 7 July the former head of the Energy and Geology Directorate, Miguel Barreto Caldeira Antunes has also been made an official suspect into Operation Cyclone.
Miguel Barreto was the man responsible for issuing a highly advantageous, open-ended licence to EDP for the power station at Sines that has a well-deserved reputation for air pollution.
The businessman, who used to work for the Boston Consulting Group, which supplied many top directors to Portugal’s power industry, left public service a year after signing the suspiciously advantageous Sines agreement and set up his own consultancy with the company Martifer, a renewable energy specialist.
This company, HomeEnergy, was sold to EDP in 2011, netting Miguel Barreto €1.4 million, a deal that is only now being investigated as part of the EDP corruption probe into price fixing.
The China Three Gorges company, which owns a 21.35% share of EDP, is likely to have paid over the odds for its EDP stake as it was assured that the flow of hundreds of million of euros of excess profits, made by overcharging electricity users, would continue indefinitely.