Big Story 10

CEO of Portugal's EDP a suspect in corruption inquiry

LISBON (Reuters) - Portugal’s public prosecutor named Energias de Portugal (EDP) CEO Antonio Mexia as a suspect in a corruption investigation on Friday after police searched the offices of EDP, grid operator REN and the local division of Boston Consulting Group.

FILE PHOTO: Portuguese electric power company Energia de Portugal's (EDP) CEO Antonio Mexia announces their fourth quarterly results during a news conference in Lisbon March 5, 2013. REUTERS/Hugo Correia/File Photo

The prosecutor said in a statement the investigation was linked to hundreds of millions of euros in 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 that started in 2004.

A spokeswoman for the prosecutor said Mexia, who has run Portugal’s biggest company since 2006, was a suspect in the case. Joao Manso Neto, who heads EDP’s renewables division, was also a suspect, she said.

Two directors at REN, Joao Conceicao and Pedro Furtado, were also named as suspects by the prosecutor’s office.

EDP said in a statement that investigators who searched its offices were given “unrestricted access to all information and all collaboration was given with a view to clarifying the facts.”

It said those named as suspects were the EDP representatives that had signed the power-purchase contracts at the time.

The prosecutor’s office said in a second statement released on Friday evening that it had collected a large amount of documentation.

“The investigation continues into what could be facts that are suspected of representing the crimes of active and passive corruption,” the statement said.

REN said in a statement that police searched its headquarters and it was collaborating with the authorities.

Boston Consulting Group also confirmed police searched its Lisbon office and said in a statement it “will continue to collaborate with authorities in whatever is necessary, always ensuring the confidentiality of its clients”.

EDP shares closed 1.34 percent lower on Friday and REN slipped 0.5 percent, while the broader market in Lisbon ended little changed.

Reporting by Daniel Alvarenga and Andrei Khalip; Writing by Axel Bugge; Editing by David Clarke and Catherine Evans