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Serbian police investigate suspected fraud in state power utility - minister
November 30, 2016 / 10:50 AM / 10 months ago

Serbian police investigate suspected fraud in state power utility - minister

BELGRADE, Nov 30 (Reuters) - The Serbian police launched an investigation into business dealings of a supply arm of the Elektroprivreda Srbije (EPS)state-run power monopoly on suspicion of fraud, the country’s interior minister said on Wednesday.

The probe came after an internal audit revealed that some employees had rigged tenders for electricity sales which led to losses of around 10 million euros ($10.64 million), Branko Kovacevic, the head of company’s Supervisory Board told state RTS television.

The police acted on several separate motions from the state prosecutor, said Interior Minister Nebojsa Stefanovic.

“We have a full investigation, ... that will show whether there were abuses and to what extent,” Stefanovic told reporters in Belgrade.

The company which employs around 30,000 people, produces almost all of Serbia’s annual consumption of 38 gigawatt-hours of electricity, of which more than two thirds in ailing coal-fired plants and the rest in hydro power plants.

Successive Serbian governments kept electricity prices low for decades to avoid social discontent and have subsidised EPS through banking guarantees.

But as part of a 1.2-billion-euro loan deal with the International Monetary Fund, under which Serbia must make state firms profitable, EPS was last year split into retail and production components.

The past two years EPS posted losses after 2014 floods damaged its coal-production facilities. It returned to profit in the first nine months of 2016. (1 euro = 122.8592 Serbian dinars) ($1 = 0.9396 euros) (Reporting by Aleksandar Vasovic; Editing by Louise Heavens)

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