Portuguese energy firms replace CEOs amid corruption probe

Shares in Portugal’s blue-chip national energy provider EDP and its international renewable energy division rose Tuesday after the companies replaced their CEOs amid a corruption investigation.

An investigating magistrate on Monday ruled that Energias de Portugal CEO Antonio Mexia and EDP Renováveis chief João Manso Neto must be suspended from their roles in the companies.

They have not been formally charged, and the magistrate continues to sift evidence gathered by the public prosecutor before deciding if the pair should be sent for trial. Both have denied wrongdoing.

The shock suspension of Mexia, reportedly Portugal’s highest-paid CEO and high-profile leader of one of the country’s biggest companies, and the head of EDP’s Madrid-based renewables division, is the latest development in an eight-year investigation into whether they corrupted Portuguese government officials to obtain benefits for EDP worth 1.2 billion euros ($1.35 billion).

EDP said in a statement that “there was no irregularity” in the matters which are under investigation, adding that the allegations “lack substance.”

EDP - Energias de Portugal, S.A. owns 82.6% of its subsidiary EDP Renováveis, S.A., which in turn fully owns subsidiary EDP Renewables North America LLC.

EDP has businesses in 19 countries on four continents, including significant interests in the U.S. renewable energy market. Its biggest shareholder is China Three Gorges, with about 21.5%, whose takeover bid last year failed.

Police are also investigating former Economy and Innovation Minister Manuel Pinho, who helped oversee Portugal’s dash to adopt renewable energy between 2005 and 2009.

EDP announced that Mexia was being replaced by 44-year-old CFO Miguel Stilwell de Andrade.

After being suspended on Monday, EDP shares rose 1.5% on the Lisbon stock exchange in morning trading Tuesday, to 4.4 euros ($5). EDP Renováveis also went up, by 1.9%, to 12.8 euros ($14.4).