PARIS (Reuters) - French nuclear group Areva AREVA.PA mishandled the $2.5 billion acquisition of Canadian start-up mining company UraMin in 2007, the outcome of a parliamentary probe said, sharing the conclusion of an earlier internal company inquiry.
The parliamentary report’s authors, like Areva’s internal investigation, did not uncover any fraud, as some had feared, and did not make recommendations for how Areva could prevent the same mistakes from happening again.
The report is the last of three on the botched takeover of UraMin’s three southern African mines which state-controlled Areva has written down almost entirely in its accounts because it is unclear when they could start producing uranium.
UraMin is: “A file that has shown, from the beginning until the end, some malfunctioning in the company’s governance and its decisional process,” Marc Goua, Socialist Party parliamentarian and Camille de Rocca Serra, parliamentarian for the ruling conservative UMP, wrote in the report published on Wednesday.
UraMin is at the centre of a dispute between ousted chief executive Anne Lauvergeon, known as “Atomic Anne,” who oversaw the UraMin acquisition, and Areva, which has withheld Lauvergeon’s 1.5 million euro severance pay.
The unusual circumstances under which Areva bought UraMin - booming demand for nuclear energy, the need to secure the supply of uranium and sector consolidation pushing up uranium prices to a record high - fueled a sense of urgency.
“It is striking to notice to what extent the documents forwarded to the social bodies (such as the Government Shareholding Agency) insist on the ‘last chance’ nature that this purchase represented,” the report said.
The Government Shareholding Agency APE acts as a shareholder for the state and clears investments and takeovers.
The sense of urgency may have led Areva to give a more optimistic view of the takeover in its presentation to the APE than in its internal version and not to involve state-owned mining body BRGM in conducting its own geological analysis of the mines next to an existing study by mining consultant SRK.
The authors of the report “noticed gaps between the two presentations with the suppression of some information or some reserved commentaries, whereas positive points were kept entirely and even highlighted.”
Lauvergeon built Areva, the world’s biggest maker of nuclear reactors, into a one-stop-shop for nuclear energy with businesses from mining to dealing with nuclear waste.
Areva had asked EDF, the world’s biggest producer of nuclear energy, to take part in buying UraMin but EDF refused after a report it commissioned from Goldman Sachs showed the risks were too high and the mining projects did not justify the price.
The authors of the report said they were “surprised” that state-controlled EDF had pulled out without giving the state all of its reasons for its decision. EDF could have alerted the APE about the potential risk UraMin presented by handing it the Goldman Sachs report.
When asked by the authors why the French utility had not forwarded the Goldman Sachs report to the APE, EDF replied: “EDF gave its opinion and decision to Areva and had no right to give it to anyone else. EDF was not requested to give its opinion by anyone on this issue.”
Lauvergeon was ousted in June after the loss of a key project in Abu Dhabi in 2009 that led to public spats between her and Henri Proglio, head of French utility EDF (EDF.PA).
Since new CEO Luc Oursel took over he has set out to improve ties with EDF, which is Areva’s main client. The two last month agreed a long-term uranium supply deal and EDF will take a stake in uranium production from Areva’s Imouraren mine in Niger.
The parliamentary report did not discuss two private investigation reports, commissioned by Areva’s security services, that emerged last year. One report unveiled spying on Lauvergeon’s husband and another suggested UraMin had been a fraud. No proof of this has been found.
The French industry ministry will not publish the findings of the UraMin enquiry it concluded last month, a spokesman said.
Additional reporting by Marion Douet; Editing by Mark Potter