Vattenfall denies allegations that the CEO, Lars G. Josefsson, should have pawned the whole company
The Swedish commercial TV channel TV4 on Thursday claimed that Vattenfall’s CEO Lars G. Josefsson has “pawned” the whole company through a deal with Vattenfall’s German subsidiary. That allegation is totally unfounded.
It is true that Vattenfall signed a deal with its German subsidiary. Such deals are commonplace in German groups. They simplify for the parental company the running of its subsidiaries. For Vattenfall it means that the company takes responsibility for its operations in Germany. Vattenfall’s Board took the decision to sign that deal on March 17, 2008. Conditions for operating nuclear power differ between Sweden and Germany, since legislation for nuclear power responsibility in the two countries is different. In Sweden, nuclear power operators are financially liable up to a certain level. In Germany, the operator has unlimited responsibility for costs that may emanate from an accident. But just as in all other business, companies take insurances. In Germany, Vattenfall has a joint insurance together with other German nuclear power operators, amounting to the equivalent of SEK 23 bn. Furthermore, regulation of financial responsibility comes in several different levels. On the first level, operative insurances get activated. Next, the nuclear power company becomes responsible for amounts not covered by insurance. If higher costs need to be covered, there are yet three more levels. The first level involves cost responsibility for the nuclear power companies jointly owned by Vattenfall and E.ON in Germany. Next, Vattenfall Europe becomes responsible jointly with E.ON’s parent company. Only after that Vattenfall AB steps in. In practice therefore, it is highly improbable that Vattenfall AB should become liable for compensation. Besides, the deal can be cancelled anytime, thus halting responsibility in Germany. For further information, please contact Erik von Hofsten, press officer Nordic, telephone +46 70 559 5484. From Vattenfall’s press department, telephone +46 8 739 50 10.