Prosecutors Launch Probe Against Mappus, Notheis on EnBW Deal
07/11/2012| 11:40am US/Eastern
Recommend:
-State overpaid for EnBW stake by 840 million euros, auditors say
-Raids conducted in eight locations
-State government aims to get back overpayment
(Adds auditor's estimate of overpayment in the second paragraph; number of locations searched in the third paragraph; comment from the state finance and economics minister in the seventh paragraph; and a statement from lawyers representing Mr. Mappus in the ninth paragraph.)
By Tapan Sharma
The public prosecutor's office in Stuttgart Wednesday opened an investigation against Stefan Mappus, the former governor of the state of Baden-Wuerttemberg, and Dirk Notheis, former head of Morgan Stanley Germany, in connection with the state's controversial purchase of a stake in utility EnBW Energie Baden-Wuerttemberg AG (>> Enbw Energie Baden Wuerttemberg AG), the prosecutor's office said.
Morgan Stanley's (>> Morgan Stanley) German operations, headed by Mr. Notheis, in 2010 advised Baden-Wuerttemberg on the purchase of a roughly 45% stake in EnBW from French state-controlled utility Electricite de France (>> EDF) for nearly 4.7 billion euros (about $5.77 billion). According to an outside auditing firm commissioned by the present state administration, the state overpaid at least EUR840 million for the stake.
On Wednesday, authorities searched apartments and office premises in eight locations, including Frankfurt, Stuttgart and Duesseldorf, and confiscated written documents and electronic data storage devices.
Morgan Stanley confirmed it was also searched, and said it is cooperating with the prosecutors.
Mr. Mappus is suspected of breach of trust and Mr. Notheis of being an accessory to breach of trust on the basis of a report prepared by the state audit office, which found irregularities in the acquisition of EnBW shares by the southern German state, the public prosecutor's office said.
According to the audit office, there were no justifiable reasons for purchasing the EnBW shares at EUR41.50 per share, when the French owner utility Electricite de France SA (>> EDF) indicated a minimum offer level of EUR39.90 each.
"The suit filed by the state government in the International Court of Arbitration, Paris, at the beginning of the year was a first and right step towards getting the purchase price reduced and taxpayers' money back," state Finance and Economics Minister Nils Schmid said.
Mr. Mappus is suspected of having caused financial losses to the state, the prosecutors said, adding he also failed to involve the state legislature in the decision.
Lawyers representing Mr. Mappus said Wednesday that he didn't commit breach of trust, and they are confident the investigation won't produce sufficient grounds for suspicion, and be terminated.
In the wake of an investigation by the German parliament, Mr. Notheis took indefinite leave from his position in the last week of June. Mr. Notheis couldn't be reached for comment.
Write to Tapan Sharma at tapan.sharma@dowjones.com
Recommend :
