Fraud Office looks into British energy firm's role in Balkans

Company denies any wrongdoing as investigators follow up special audit report ordered by Bosnian administrator Lord Ashdown

David Leigh and Rob Evans
Tuesday February 15, 2005
The Guardian

A British energy company has been accused of exploiting poverty-stricken countries in the Balkans and is being investigated by the Serious Fraud Office for alleged corruption, the Guardian can disclose.

This is the first significant attempt by the SFO to enforce the anti-bribery law, introduced three years ago, which has not yet led to a prosecution. If it brings charges, they could be tried in either London or Bosnia.

The company denies breaking the law and says it is the victim of political in-fighting, It says it has suffered “misstatements, innuendos and false allegations” in a special auditors’ report.

EFT Ltd is an electricity trading enterprise with its headquarters in Wigmore Street, London. It is alleged to have gained a stranglehold on power deals and dam-building projects in Bosnia, Serbia and Montenegro.

The UN's High Representative in Bosnia, Paddy Ashdown, claims that possible corruption by politicians in the region may be helping to finance renegade war criminals, and he is determined to stamp any such corruption out.

He commissioned a series of special audits which allege that kickbacks may have been solicited by state power company officials to write advantageous electricity-swap contracts with private companies.

“The public utilities have been used as cash cows to line the pockets of politicians and others,” Lord Ashdown told the Guardian. He has dismissed the head of the Republika Srbska state power company for mismanagement. “I have no doubt that illegal, corrupt money is used to protect war criminals,” he said.

There are 18 major suspected war criminals at large, including the Bosnian Serb military chief Ratko Mladic, indicted for incidents of genocide, including the massacre in 1995 of 8,000 Muslims at Srebenica, and Radovan Karadzic, the one-time Bosnian Serb president. EFT is not accused by the auditors of being involved with war criminals, and it denies paying kickbacks. The report called for its contractual relationships with the state company to be investigated.