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Vattenfall board in corruption unit probe

Sweden's National Anti-Corruption Unit (Riksenheten mot korruption) is to investigate whether to open a case against the board of energy firm Vattenfall, after revelations of the 12 million kronor ($1.9 million) golden parachute payment to the former CEO.

Published: 24 March 2011 08:06 CET

Vattenfall board in corruption unit probe

“I have asked the police to gather written documentation and then I shall see where it leads,” said chief prosecutor Alf Johansson to the Svenska Dagbladet daily.

The preliminary investigation has been classified as a case of aggravated breach of trust.

The Swedish government last week fired Vattenfall chairperson Lars Westerberg as a result of the erroneous pensions payment to the former CEO.

A secret agreement to pay Josefsson a year of his two year notice period in the form of a regular pensions payment was brokered by Westerberg and Gejrot and has now been found to be in breach of government guidelines on remuneration.

The agreement was discovered by the firms accountants in the beginning of the year.

Lars Westerberg has explained his decision by claiming that he did not have all the relevant information, although he has been unwilling to claim that anyone deliberately misled him.

The former CEO Lars G. Josefsson has declared that he is prepared to pay back the remuneration and is due to do so by the end of March.

Vattenfall’s press office stated on Wednesday that the firm’s leadership declined to comment on the investigation.

“We don’t want to comment on a legal process until it is completed.”

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Swedish energy firm racks up giant losses

Vattenfall chief executive Magnus Hall on Tuesday. Photo: Fredrik Persson/TT

Hit by asset write-down charges worth 36 billion kronor, Sweden's Vattenfall reported a net loss of 28.812 billion kronor in the second quarter of the year, a huge drop from 2.3 billion kronor in the same period in 2014.

The state-owned energy firm, a major provider of electricity in northern Europe, has been struggling to improve profits for several years, suffering from weak demand and plunging electricity prices.

It attributed 17 billion kronor of the total asset write-downs to the same fall in profits which led to a shock announcement earlier this year that it planned to close Ringhals 1 and 2 in south-western Sweden.

It said at the time that the two reactors were too costly to keep in production until 2025 as previously planned.

“This is of course very negative but unfortunately reflects the reality we're living in,” said its chief executive Magnus Hall in a statement on Tuesday morning.

It also wrote down an additional 15 billion kronor on its lignite, or brown coal, assets in Germany.

Earlier this year Vattenfall announced that 1,000 workers were being let go as part of a series of bids to curb losses, including speeding up the sale of the German plants.

It reported a total turnover of 36.1 billion kronor in the second quarter of 2015 on Tuesday, down from 36.6 billion in the same period last year.

Hall said that the work to tighten the belt was continuing “to identify further reductions in costs”.

Since the Vattenfall Group bought energy giant Nuon in 2009, a deal which has been hotly debated in Sweden, the firm's assets have been written down by over 52 billion kronor.

Many energy providers in Europe have made huge asset write-downs in the last two years because of weak demand for electricity against a background of sluggish economic activity.

They have also been caught out by the US shale energy boom, which has pushed down the price of coal for power generation, undermining the profitability of new gas-powered plants and some investment programmes.

Vattenfall employs more than 30,000 and has operations in Sweden, Finland, Denmark, Germany, the Netherlands and Britain.

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