Vattenfall's coal power plant in Berlin, the company's logo, and the company's CEO and chairman of the board presenting the quarterly report. Photo: Jan-Morten Bjørnbakk/Bertil Ericson/Leif R Jansson/Scanpix. Montage: Sveriges Radio.

Conflicting stories about what the government knew in Vattenfall deal

After this week's announcement that Sweden's state-owned power company Vattenfall will be dividing in the face of giant write-downs, questions have arisen about how much the government and the Prime Minister knew about a deal that wound up being disastrous for the company: after Vattenfall bought the Dutch Nuon for SEK 89 billion in 2009, Nuon lost 42 percent of its value.

This week, according to Swedish Radio News, the financial markets minister, Peter Norman of the conservative Moderates, claimed that the then-minister of commerce, Maud Olofsson of the Center party, never informed the other party leaders in government about the impending purchase.

While Olofsson has not wanted to comment on the affair recently, what she told Swedish Radio News in February of this year paints another picture than Norman's.

According to Olofsson, she first posed critical questions to Vattenfall's board, saying she was very doubtful about the deal. "Can you manage the returns if you make this investment?" she remembers asking, and the answer she got was, "yes".

Then, Olofsson said, she anchored her actions with the government. "Naturally, they asked the same questions I had," she said, "and since we got the answer from the board that they would be able to manage the returns, we had no reason to doubt it."

Neither Prime Minister Fredrik Reinfeldt of the conservative Moderates, nor the two other party leaders (from the Liberals and the Christian Democrats) in the center-right coalition government have allowed themselves to be interviewed about this, but they say they have the same version of the story as Norman, according to Swedish Radio News.

However, the finance minister Anders Borg of the conservative Moderates, has said he had information about the purchase in advance.

"Obviously, we in the finance department also raised a number of questions," Borg said, describing their questions as very similar to the ones Olofsson's commerce department had posed.

Olofsson's top civil servant, Ola Alterå, had direct contact with Borg's top civil servant, Hans Lindblad, according to a memo written by the commerce department. According to the same memo, Olofsson was also to have taken up the issue with the Prime Minister and the other party leaders, and then, returned to the conclusion that "there is no reason to say no to the transaction". According to the document, this happened at the same time as Vattenfall's board decided to make an offer for Nuon but before the bid itself was made.

At a press conference on Tuesday, Norman said that he has spoken with the affected parties and concluded that the document does not reflect what happened in reality. But Norman did not want to say how and whether Olofsson was one of the people he spoke to. Instead, he refered media to Parliament's Committee on the Constitution, which is expected to look into the issue in the spring.

Because the committee does not have access to what was said between the party leaders, however, it is uncertain whether their involvement can clarify what happened and who in the government knew what about the affair, which proved to be a disaster for the state's biggest company.

However, some do not see Vattenfall's situation as completely negative. Vattenfall's former CEO, Lars G. Josefsson, tells Swedish Radio P4 Extra that he is very pleased, considering the European economic crisis and recession, which he had not anticipated.

"We made the deal after careful analysis and forecasts for the future," he says, and he says the company is still worth more than it was when he took over at the beginning of the millenium.

"It's important that it's made clear that Vattenfall's development is not in any way burdening the taxpayers," he says. "Actually, they're winners."

Josefsson goes on to say that the money is not lost. "If in five years, it turns out that the gas market is different with higher electricity prices, maybe the value will go up again," he says.

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