LUSA 10/30/2024

Lusa - Business News - Portugal: Charges against former EDP board directors a 'headlong rush' - defence

Lisbon, Oct. 29, 2024 (Lusa) - The defence of former EDP board directors António Mexia and João Manso Neto considers the prosecution of the CMEC case to be a "headlong rush" by the Public Prosecutor's Office and that the corruption imputed to the two defendants is unfounded.

In a response sent to Lusa, lawyers João Medeiros, Inês Almeida Costa and Rui Costa Pereira emphasised that, 12 years after the enquiry into the Costs of Maintaining Contractual Equilibrium (CMEC) was opened, this accusation "had to go ahead. Otherwise, the investigating parties would lose face".

"This is a baseless accusation: the rules relating to the implementation of CMECs and the extension of the Public Hydric Domain were set before António Mexia and João Manso Neto joined EDP's Board of Directors; they did not generate any benefit for the company; the decisions were always collegiate; and they were duly and extensively scrutinised, in particular by the European Commission," they said.

António Mexia and João Manso Neto were both charged on Monday with active corruption for the unlawful act of a political office holder. The Public Prosecutor's Office believes that the two former directors corrupted former Economy Minister Manuel Pinho.

The former minister was also charged with passive corruption for the unlawful act of a political office holder, the same offence charged against the other defendants: Miguel Barreto, former director-general of Energy, João Conceição, director of REN and former advisor to the former minister, and advisor Rui Cartaxo.

According to the defence of António Mexia and João Manso Neto, the legislation on the transition from the PPA (Power Purchase Agreements) regime to the CMEC (Contractual Equilibrium Maintenance Costs) was approved in 2004, even before the two defendants became EDP directors, and its implementation in 2007, under the government that Manuel Pinho was part of, "not only did it not benefit EDP, it harmed it to the benefit of the state".

"It introduced an unanticipated corrective factor in 2004, which forced EDP to make an unforeseen additional payment of €755 million," the defence note said, adding that the "correctness of the decisions regarding the evaluation of the CMECs and the public water domain, and their respective assumptions - which the MP calls into question in the indictment - has already been confirmed a posteriori by the European Commission.

The lawyers also argued that the electricity company's award of the rights to operate the Alqueva and Pedrógão power stations without a public tender merely implemented "rights that have been recognised by EDP for several years" and that all the decisions called into question by the Public Prosecutor's Office were taken collectively and ratified by the company's General Supervisory Board.

"It demonstrates how the Public Prosecutor's Office has always denied the obvious, "sweeping under the carpet" the multiple pieces of evidence that exist in the case and that demonstrate the legality of the defendants" actions, which were limited to defending the interests of EDP and the State," they continued, stressing: "This accusation is a “flight forward”, based on an unbiased investigation that has dragged on and on and has never had the purpose of really ascertaining the truth."

The indictment marks the end of an inquiry opened in 2012 into EDP's Contractual Equilibrium Maintenance Costs (CMEC). In December 2022, this process also led to indicting former minister Manuel Pinho, his wife Alexandra Pinho, and former banker Ricardo Salgado for facts unrelated to this situation.

The enquiry was then separated, with the investigation essentially targeting former EDP directors António Mexia and João Manso Neto, who had to leave their positions at the electricity company as a result of this case, continuing until now.

JGO/ADB // ADB.

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