Imtech: Investigating Fraud Allegations

Maritime Activity Reports, Inc.

November 6, 2014

Dutch engineering and construction firm Imtech is investigating allegations it operated a cartel to overcharge German energy company RWE for the building of a power plant in the Netherlands.

The allegations, detailed in Dutch newspaper De Telegraaf and German newspaper Handelsblatt on Thursday, follow earlier allegations of accounting fraud at its German and Polish operations.

The company put out a statement late on Tuesday in response to questions put to it by the two newspapers in which it mentioned "allegations of possible competition law violations" on "two projects in the energy sector" between 2008 and 2010 without going into further detail.

Imtech has opened an internal investigation with the help of external experts immediately after receiving information from a whistleblower on Aug. 29, but that it had not intended to make public the allegations until the process was complete.

"The investigation is still running," said Chief Executive Gerard van de Aast in a telephone briefing on Thursday. "At this moment there is no proof that competition law has been violated."

RWE said it would seek compensation if fraud was proven.

"If it should turn out that there were agreements between third parties that were disadvantageous to our company, we will demand compensation, as RWE always does in cases of cartel agreements," it said in a statement.

De Telegraaf reported that partners in the cartel got compensation for keeping prices high by sending false invoices to Imtech in a fraud that had cost RWE's Dutch unit Essent "millions".

Imtech said the allegations related to possible wrongdoing in the period between 2008 and 2010. It said legal restrictions prevented it from giving any details on the progress of the investigation, including on whether police or competition authorities were involved.

A spokesman for the Dutch competition authority said it could not comment on whether it had an investigation under way or not.

"However, we are interested in the allegations in the media about Imtech," said Murco Mijnlieff, spokesman for the Dutch Authority for Consumers and Markets.

Once a darling on the Amsterdam stock exchange, Imtech earlier this year carried out a 600 million euro rights issue, announced plans to sell its information technology arm and cut 750 jobs in a bid to reduce hefty debts and restore the company to profitability.

Imtech handed over documents relating to the earlier alleged accounting fraud to German and Polish authorities last year. They have yet to take a decision on how to proceed.

(Reporting by Thomas Escritt, additional reporting by Tom Kaeckenhoff in Duesseldorf; Editing by Mark Potter/Keith Weir)

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