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UPDATE 1-EDP chief denies wrongdoing over contracts under investigation
June 6, 2017 / 10:40 AM / 4 months ago

UPDATE 1-EDP chief denies wrongdoing over contracts under investigation

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LISBON, June 6 (Reuters) - The head of Portuguese power company EDP-Energias de Portugal said on Tuesday he will not resign over an investigation into agreements on liberalising the country’s electricity market, in which he has been named as a suspect, and denied wrongdoing.

Police raided the offices of EDP, grid operator REN and the local division of U.S. consulting firm Boston Consulting Group on Friday in a probe of past contracts on the electricity market, saying it suspected “crimes of active and passive corruption.”

EDP CEO Antonio Mexia told journalists “no” when asked if he intended to resign.

“There was clearly no benefit for EDP, either in 2004 or in 2007,” said Mexia. “The company’s management and supervisory bodies cannot take lightly people’s good names being called into question.”

Joao Manso Neto, the head of EDP’s renewables division EDPR , as well as two directors at REN, have also been named as suspects.

EDP chairman Eduardo Catroga told the same press conference that EDP shareholders stood by Mexia.

Portugal’s public prosecutor has said the investigation is linked to hundreds of millions of euros of state compensation paid to former monopoly EDP for giving up some long-term power-purchase contracts as part of the liberalisation of the power sector.

Mexia said the European Commission had looked into the same contracts, dating back to 2004, and decided to shelve the case. The CEO said the contracts in question were negotiated between Portugal’s government and the European Commission.

Shares in EDP were 2.3 percent higher on Tuesday after sliding on Monday. (Reporting by Sergio Goncalves, writing by Axel Bugge; Editing by Adrian Croft)

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