16 November 2009 - Swedish utility Vattenfall has denied that outgoing CEO Lars G. Josefsson "pawned the company" through a nuclear insurance deal with Vattenfall's German subsidiary.
The Swedish television channel TV4 claimed that Vattenfall's CEO Lars G. Josefsson has "pawned the whole company" by signing a nuclear insurance policy for Vattenfall's German subsidiary on 17 March 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 out insurance policies. In Germany, Vattenfall took out joint insurance with other German nuclear power operators worth SEK 23bn ($3.4bn).
A spokesman for Vattenfall said: "[TV4's] 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.
"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."
Meanwhile, Vattenfall has named Oeystein Loeseth as the successor to Lars Josefsson as chief executive officer before next summer.
Loeseth is currently CEO of Dutch company Nuon Energy, 49 per cent owned by Vattenfall. Vattenfall has been seeking a replacement for Josefsson since the summer because he had planned to retire when he turns 60 next October.