(Bloomberg) -- Electricite de France SA faces a possible $11 million fine after being accused by French regulators of providing false information on the Hinkley Point C nuclear project and lacking transparency concerning new circumstances that ramped up its cost.
In October 2014, EDF announced it would build the U.K.'s first nuclear reactors since 1995 after reaching a deal with the government on guaranteed prices for the power they'd generate. The energy firm also said the project would benefit from a British credit guarantee on conditions that were yet-to-be agreed.
EDF and former chief executive officer Henri Proglio should have specified in a statement a year later that the U.K. had said it would impose heavy equity requirements to provide the credit guarantee, according to Bernard Field, an official at the Autorité des Marchés Financiers. Those were a game-changer, he said at a Friday hearing of the regulator's enforcement committee.
EDF and its current CEO Jean-Bernard Levy were also criticized for taking too long to warn the market that the company would bear more costs and would consolidate the investment by global integration. Field, who plays the role of a devil's advocate in the case, listed investigators' allegations but said he disagreed with them on the second accusation.
Blow to U.K. Nuclear Plans as EDF Warns of Higher Costs
Virginie Adam, the AMF official who spoke on behalf the regulator's prosecuting body, said EDF should be fined 10 million euros ($11 million) for both alleged wrongdoings while Proglio and Levy should each get a 50,000-euro fine. EDF denies the accusations as did the two men who said they didn't understand what they did wrong.
“If I had to do it again I would proceed in exactly the same manner,” Levy told the AMF panel, with Proglio saying the same later on Friday.
“I came to tell you that I am greatly frustrated to see that my professionalism is called into question,” Levy said in closing remarks.
The AMF's enforcement committee assesses civil market-abuse cases ranging from insider trading to publishing misleading information. It issues decisions and fines several weeks after the hearings.
Stéphane Bénouville, a lawyer for EDF, said the fine sought by Adam was out of proportion with the allegations. He cited a case with similar accusations against telephone company Iliad SA last year where the AMF Board sought a 500,000-euro penalty.
Bénouville said the October 2014 statement was perfectly accurate as a new approach to the project was taken into consideration only in 2015 after anomalies came to light in a nuclear plant being built in Flamanville, France, that was meant to have the same reactor as Hinkley Point.
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