State prosecutors and tax fraud investigators from Mannheim searched the offices of German utility Energie Baden-Wuerttemberg (EnBW) on 18 April.
"The search is related on the one hand to ongoing investigations regarding Russian business dealings back in the years 2001 to 2008, and on the other in connection with the so-called sales tax carousel as part of the international trade of carbon dioxide certificates," the company said.
The former is related to dealings between EnBW management and the Bykov Group involving uranium deliveries to and decommissioning of EnBW’s reactors in Germany.
The ‘carousel trade’ involved a ring of European traders. They had imported carbon emissions permits in one country without paying value-added tax and then sold them to each other, adding tax to the price and pocketing the difference.
"Both investigations have been known for a long time and were the subject of comprehensive reporting," EnBW said in a statement, adding it was supporting the authorities in their investigation.
The Mannheim prosecutor’s office said preliminary investigations had revealed concrete clues that the EnBW group and its subsidiaries submitted tax returns for 2001-2008 that incorrectly claimed deductions for business expenses paid out to companies of the Bykov Group.
"The state prosecutors office in Mannheim has launched an investigation of seven corporate officers, some of whom are no longer in place, suspected of evading taxes and committing fraud, damaging the company EnBW," it said in a statement.
In a separate investigation by the state of Baden-Wuerttemberg, also involving EnBW, French police searched several EDF offices, including that of chief executive Henri Proglio on 1 March. Their search was in connection with the 2010 purchase of EDF’s stake in EnBW.
German prosecutors opened preliminary proceedings last July into alleged links between a Morgan Stanley’s negotiator in Germany and one of Baden-Wuerttemberg’s top politicians relating to the state’s share purchase. Baden-Wuerttemberg state prosecutor’s office said that EDF and Morgan Stanley staff were not under investigation at the present time.
Paris police stated that the probe was led by German authorities and that French judicial authorities were not involved in the case, which centres on an agreement by Baden-Wuerttemberg to buy EDF’s 45 % stake in EnBW for 4.7 billion euros in late 2010, enabling the French company to cut debt.
Stuttgart prosecutors said last year that the ex-premier of Baden-Wuerttemberg, Stefan Mappus, was suspected of breach of trust and of having overpaid for the EnBW stake, while Morgan Stanley banker Dirk Notheis could have aided him in the matter.
Mappus said at the time that he did not overpay and that the charges were unfounded. Notheis stated that all the accusations were without merit.
