Areva probe critical of UraMin buy, no proof of scam
By Caroline Jacobs and Benjamin Mallet
PARIS (Reuters) - An internal inquiry at Areva (AREVA.PA: Quote) has not found any evidence of fraud linked to the French nuclear group's takeover of Canadian mining company UraMin but criticized the way it was bought and urged changes to Areva's corporate governance.
State-controlled Areva bought UraMin's three Southern African mines for $2.5 billion in 2007, when buoyant demand for nuclear energy combined with production delays at other mines, a frenzy to secure supplies and acquisitions in the sector pushed uranium prices to $135 a pound.
But the UraMin mines have yet to prove their money's worth at today's price of $52 a pound, prompting Areva in December to write down nearly their entire value and to appoint three of its supervisory board members to conduct a review.
The supervisory board pointed to a "certain malfunctioning in Areva's governance" and concluded that the context of 2007 led the company, at the time led by Chief Executive Anne Lauvergeon, "to underestimate the risk" of the acquisition.
Among its criticisms, the supervisory board said that the managing board had failed to clearly point to the operational risks in getting the mines to produce during presentations to the Government Shareholding Agency (APE), which acts as a shareholder for the state and clears investments and takeovers, or to the supervisory board.
Areva's write-down prompted speculation that the deal had been a scam and the story turned into a complex saga with the emergence of a report commissioned by Areva's security service on whether Lauvergeon's husband had "illegally benefited" from the takeover. No proof has been found.
"If certain rumors have led to believe that Areva has been a victim of a fraudulent moves, the committee has no knowledge of any elements supporting these hypotheses," the supervisory board wrote in a statement on Tuesday.
Under Lauvergeon, dubbed "Atomic Anne" for her feisty personality, Areva developed into a one-stop shop for nuclear energy. But the government ousted her in June after 10 years at the helm following a string of setbacks, including project delays, cost overruns and a public spat with utility EDF (EDF.PA: Quote). Continued...