ECONOMY minister 1ubomír Harach has decided not to make personnel changes at state-owned Slovak electricity producer Slovenské elektrárne (SE) in response to the utility's controversial participation in tenders for 49 per cent stakes in central and eastern Slovak energy distributors SSE and VSE.
Privatisation Ministry spokesman Róbert Merva confirmed on May 15 that SE had submitted a common bid for the distributors with the Italian company E-Noi, and that SE had been responsible for providing a financial guarantee for the transaction.
SE, which is heavily indebted with almost Sk58 billion ($1.2 billion) in bank loans, rivalling its equity, was faulted for not having secured approval for the bid from its principal shareholder, the Economy Ministry.
"I will demand an explanation from Harach," said Deputy Prime Minister for Economy Ivan Mikloš, who called SE's behaviour "scandalous".
Harach had suggested the previous week that SE's step might lead to personnel changes at the company after an investigation into the affair.
SE is controlled by the Economy Ministry, which executes its shareholder rights through membership on the supervisory board and the general assembly.
Harach complained that SE had never asked the ministry's approval for its tender participation, and that participation had not been approved by either the supervisory board or the general assembly, only the board of directors.
Furthermore, said Harach, the ministry had been informed of SE's participation only shortly before final bids were submitted.
SE head Vincent Pillár explained that company management had simply followed the rules. "Stepping into another company has to be approved by the general assembly, but we were not going to step into another company. We were only presenting our interest; we had enough time to ask the assembly.
"SE had the same right to take part in the sales as every other producer, simply to secure the sale of its own product," said Pillár.
"I consulted this issue with minister [Harach] and he neither approved nor disapproved such a step," he added.
The privatisation committee eventually recommended Electricité de France (EdF) as the buyer of the 49 per cent stake at SSE and the German RWE Plus for VSE, saying: "The EdF bid meets the tender criteria better."
Ondrej Studenec, head of the energy section at the Economy Ministry and head of SE's supervisory board, said the committee's decision had been correct. "EdF is an aggressive and experienced player on the liberalised market, while SE does not possess energy distribution related know-how.
"Proof of this is their attempt to acquire distribution companies in order to control the market, which is an incorrect method. But the true reason for SE's interest was an attempt to enlarge its property in order to get new loans and distribute profits from these companies into its investments," said Studenec.