EnBW Chief Investigated for Fraud

Public prosecutors said Thursday that they had launched a preliminary investigation against the head of EnBW energy supplier, Utz Claassen, on suspicion he may have falsified the group's accounts. "We have launched a preliminary investigation against the current chairman of EnBW on suspicion of false accounting in the 2003 business year," a spokesman for the Mannheim prosecutors told AFP. Claassen took over as chief of the power supplier in May 2003. EnBW immediately dismissed the allegations as "groundless and unfounded." The prosecutors' investigation "is based on completely false assumptions. There is documentation that unequivocally proves that," EnBW said in a statement. The local daily Stuttgarter Nachrichten reported in its Thursday issue that investigators were particularly interested in the downward revision of the valuation of shareholdings acquired by EnBW under Gerhard Goll, when Claassen took over from his predecessor. EnBW booked an annual net loss of more than one billion euros ($1.3 billion) in 2003. The finance chief stepped down and Claassen embarked on a drastic restructuring, including one billion euros in cost-cutting, around 2,000 job cuts and a clean-sweep of the group's shareholdings. EnBW managed to return to profit in 2004, booking a pre-tax profit of 707 million euros.