Energy firms colluded in 2009

ČEZ and two other major energy companies signed an agreement last year that detailed a plan to gain even greater dominance of the Czech energy market, according to a document leaked to the Financial Times.

The agreement was described by the publication as a secret document detailing a share-swapping scheme. The document was signed June 24, 2009 by senior officials at ČEZ; J&T Finance Group, a Czech finance and energy group; and Energie Baden-Württemberg (EnBW), a German energy group.

Analysts and spokespeople for the three companies countered that there was nothing new or unknown in the document, as it was part of the information obtained by the EC when they ordered a raid on ČEZ offices last year.

ČEZ could not buy an Opatovice power plant being sold by International Power for regulatory reasons. To sidestep the rules, EnBW agreed not to bid for the plant, and allowed J&T Finance to buy it with some funding help from ČEZ.

A series of complicated share-swapping ensued, wherein the three companies agreed ahead of time to sell certain stakes in energy companies. Together, ČEZ and J&T Finance were able to finagle a deal that gave them a combined share of almost 100 percent in Pražská teplárenská.

All three of the energy companies said the agreement was completely legal and had been available to the EC for the investigation.

"I can say that the document focused on a transaction of share packages, and there is no competition-legal aspect affected," said Dirk Ommeln, a spokesman for EnBW told The Prague Post.

Martin Maňák, a spokesman for Energetický a průmyslový holding (EPH) - the energy subsidiary of J&T Finance - said in a statement the document had been leaked by lobbying company Candole.

"Some time ago, this company actively offered its lobbying services to us, but we rejected its offer. Candole is evidently working for a different customer now," he said.

The EC is currently conducting an antitrust investigation that started last November with a raid on the offices of ČEZ and EPH.

"The commission has reason to believe that action carried out by ČEZ unilaterally or together with other players may have led to a substantial distortion of competition and resulted in the enhancement of ČEZ's dominant position on the Czech wholesale electricity market. The suspected illegal conduct may comprise excluding competitors and raising prices on the Czech wholesale electricity market," the commission said in a statement at the time.

Cat Contiguglia can be reached at
ccontiguglia@praguepost.com