Friday, October 23, 2020

CEO of Portugal’s utility firm EDP suspended amid corruption probe

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A Lisbon judge ordered the chief executive of EDP-Energias de Portugal (EDP.LS), Antonio Mexia, to be suspended along with the CEO of subsidiary EDP Renovaveis as part of a corruption investigation, a source familiar with the decision said.

The ruling was reported by news website ECO earlier on Monday.

Miguel Stilwell d’Andrade, currently chief financial officer of EDP, will take over as interim CEO while Mexia is suspended, according an EDP statement published by Portugal’s market regulator CMVM.

Portugal’s public prosecutor indicted Mexia and EDP Renovaveis (EDPR.LS) CEO Joao Manso Neto three years ago on suspicion of corruption in a case that involved former Portuguese Economy Minister Manuel Pinho in 2007. EDP, the two executives and Pinho have always denied any wrongdoing.

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Court officials were not immediately available for comment.

“EDP reaffirms that regarding these matters there was no irregularity that can be attributed to the company,” the company’s statement on Monday evening read.

ECO and media outlets, including the Expresso weekly’s website, said the decision to suspend the executives with immediate effect was taken by Judge Carlos Alexandre, who is separately presiding over another corruption case involving former Prime Minister Jose Socrates.

CMVM suspended trading in shares of both companies. In separate statements, the market regulator said it awaited their disclosure of relevant information to the market.

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EDP shares fell 2.4% in afternoon trading while the broader market in Lisbon was up 0.09%.

The public prosecutor has alleged that Pinho personally benefited when he approved a scheme to compensate EDP for the early end of fixed multi-annual Power Purchase Agreements (PPA), and a 25-year extension of 27 dam concessions without public tender.

The public prosecutor has said EDP subsequently sponsored a renewable energy course at a major U.S. university, taught by Pinho, as a reward.

In a court document seen by Reuters, Mexia and Manso Neto rejected the prosecutor’s claims, calling them “fictional narrative” and said the proposed suspension was “illegal” as a manager can only be dismissed by shareholders.

Original article on Reuters

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