Wednesday, November 2, 2016

Analysts: the Poison of Competition on EDP “hard to prove” – Jornal de Negócios – Portugal

The Competition Authority (AdC) is to investigate whether EDP broke the law in the market of system services, between 2009 and 2014, reports the journal Public, giving an account that the conduct of the company led by António Mexia in this market that has a dominant position had recently been under the scrutiny of an independent auditor.

According to the same source, the AdC considers to be evidence of practices restrictive of competition that justify the opening of an investigation against crime to the EDP, being that the decision has already been communicated by the regulator to the secretary of State for Energy, Jorge Seguro Sanches.

Ended its inquiry, the regulator may order the EDP and app ly a fine that can go up to 10% of the volume of business of the company, or to dismiss the case.

On the note of “research”, the Haitong says that this news has an impact of “potentially negative” for the EDP, although stressing that it is “small” the risk of the company led by António Mexia be ordered to pay a thing due to this process. These cases are usually difficult to prove, and the imposition of a fine requires evidence that the EDP actually implemented these practices [anti-competitive] and not just circumstantial evidence”.

The external auditor concluded that the EDP will have obtained additional gains of 60 million euros with the distortion of the liberalised market.

analysts of the BPI point in the same direction of the Haitong: “it Will be very difficult to prove” that the EDP has made the restrictive practices of the competition, and that “a possible scenario may be a tightening o f monitoring by the regulator and the Government of the operations with CMEC and system services”.

“either way, if the EDP is required to return to consumers, one-time gains of 60 million euros referred to in the news, this will represent an amount immaterial, representing 2 cents per share and 0.5% of our target price of 3,40 euros for the end of 2017″, says the BPI, which has a neutral recommendation for the EDP.


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