Portugal's EDP says headquarters searched in tax investigation

Tax fraud related to the multibillion-euro sale of six dams to French company Engie


LISBON- Portugal's largest utility EDP on Tuesday said its headquarters had been searched as part of an investigation into alleged tax fraud related to the multi-billion-euro sale of six dams to French company Engie.

In December 2019, EDP agreed to sell six hydroelectric power plants in the Douro basin to an international consortium led by Engie for 2.2 billion euros ($2.60 billion). The sale process was concluded a year later.

Over recent months, Portuguese opposition lawmakers have accused EDP of setting up a financial scheme to avoid paying over 100 million euros in stamp duty taxes.

An EDP spokesperson said the group's headquarters in Lisbon had been searched but that the company believed it had done nothing wrong.

"EDP is fully cooperating with the authorities and remains convinced that the sales operation complies with all legal requirements," the spokesperson said.

Engie did not immediately respond to a request for comment.

In March, Finance Minister Joao Leao told a parliamentary committee the tax authority was working on the case and gathering "preparatory elements" to force EDP to pay the taxes if they find out the company used loopholes to avoid the payment.

EDP said the way the sale had been organised was intended to guarantee the dams would continue to operate smoothly and not to avoid taxes.

(Reporting by Sergio Goncalves, additional reporting by Benjamin Mallet in Paris Editing by David Goodman and Barbara Lewis) ((sergio.goncalves@thomsonreuters.com; +351213509204; Reuters Messaging: sergio.goncalves.reuters.com@reuters.net))

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