Areva SA
€18.31
-0.19
UPDATE 2-French prosecutor investigates Areva's 2007 UraMin buy
Thu Apr 10, 2014 9:00pm IST
Paper says state auditor to hear former Areva CEO
* Lauvergeon says UraMin deal was approved by authorities
* Her lawyer says she did not oversee the UraMin deal (Adds Lauvergeon, Cour des Comptes reaction)
PARIS, April 10 (Reuters) - France's financial prosecutor has opened a preliminary investigation into state-controlled nuclear group Areva's $2.5 billion acquisition of Canadian uranium mining company UraMin in 2007, a judicial source said on Thursday.
French daily Le Monde reported that the prosecutor is investigating possible "presentation or publication of inaccurate or untrue accounts", "distribution of false or misleading information", and "forgery".
Areva declined to comment.
The newspaper said the French Cour des Comptes, a quasi-judicial auditor that oversees state accounts, had referred the case to the prosecutor following its own audit of Areva's accounts between 2006 and 2012.
It added that the audit body is set to publish a report about Areva after questioning its former chief executive Anne Lauvergeon, who ran the firm from 2001 to 2011, in coming days.
The Cour des Comptes declined to comment.
Lauvergeon said in a statement that the UraMin acquisition had been approved by all of Areva's decision-making bodies and that the rules of good governance had been respected.
She said that Areva's board, state holding company APE and the industry ministry had received complete information about the operation and that Areva's accounts for 2007 to 2010 had been approved without reservations by the company's auditor.
"The depreciation that took place at the end of 2011 was mainly due to the impact of the March 2011 Fukushima accident on uranium prices," Lauvergeon said.
She added that, under her leadership, Areva had become a global leader in the nuclear sector and that its stock price had strongly outperformed the French CAC40 index.
Areva's shares traded around 23 euros when Lauvergeon was appointed as CEO. They soared to more than 80 euros before the 2008 financial crisis but fell back to around 23-24 euros when Lauvergeon left.
They were down 1.35 percent at 18.25 euros at 1518 GMT, while the CAC 40 index was down 0.6 percent.
At the time of the 2007 acquisition, Lauvergeon described the deal as "a major step in Areva's ambitious plan to increase its uranium production".
Uranium prices subsequently fell and UraMin's reserves, mostly in southern and central Africa, turned out to be lower than initially estimated, forcing Areva to take a writedown of close to 1.9 billion euros over the years 2010 and 2011.
Areva did an internal audit into the deal after the departure of Lauvergeon, who was replaced by Luc Oursel in June 2011. The audit pointed to shortcomings in corporate governance and information but did not reveal fraud or question the reliability of the company's accounts.
It did underline that Areva had paid dearly for UraMin, that management had underestimated the risks linked to the acquisition and that presentations made to state holding company APE and to Areva's board had not given enough prominence to the doubts that the internal technical teams had expressed.
Le Monde also wrote that the ongoing investigation was a key reason for the fact that Lauvergeon - a former aide to the late socialist President Francois Mitterrand - had not been selected to be part of the new socialist government of Prime Minister Manuel Valls.
At the time of the acquisition, Oursel was a member of Areva's board and the head of its nuclear reactor unit.
At the presentation of Areva's 2013 earnings in February, Oursel told Reuters that UraMin's uranium mines in Africa had been mothballed, awaiting a recovery in uranium prices.
Uranium prices have fallen from all-time highs near $140 per pound in 2007 to as low as around $33 this year. (Reporting by Chine Labbe, Benjamin Mallet and Geert De Clercq; writing by Geert De Clercq; editing by Jane Baird)
Paper says state auditor to hear former Areva CEO
* Lauvergeon says UraMin deal was approved by authorities
* Her lawyer says she did not oversee the UraMin deal (Adds Lauvergeon, Cour des Comptes reaction)
PARIS, April 10 (Reuters) - France's financial prosecutor has opened a preliminary investigation into state-controlled nuclear group Areva's $2.5 billion acquisition of Canadian uranium mining company UraMin in 2007, a judicial source said on Thursday.
French daily Le Monde reported that the prosecutor is investigating possible "presentation or publication of inaccurate or untrue accounts", "distribution of false or misleading information", and "forgery".
Areva declined to comment.
The newspaper said the French Cour des Comptes, a quasi-judicial auditor that oversees state accounts, had referred the case to the prosecutor following its own audit of Areva's accounts between 2006 and 2012.
It added that the audit body is set to publish a report about Areva after questioning its former chief executive Anne Lauvergeon, who ran the firm from 2001 to 2011, in coming days.
The Cour des Comptes declined to comment.
Lauvergeon said in a statement that the UraMin acquisition had been approved by all of Areva's decision-making bodies and that the rules of good governance had been respected.
She said that Areva's board, state holding company APE and the industry ministry had received complete information about the operation and that Areva's accounts for 2007 to 2010 had been approved without reservations by the company's auditor.
"The depreciation that took place at the end of 2011 was mainly due to the impact of the March 2011 Fukushima accident on uranium prices," Lauvergeon said.
She added that, under her leadership, Areva had become a global leader in the nuclear sector and that its stock price had strongly outperformed the French CAC40 index.
Areva's shares traded around 23 euros when Lauvergeon was appointed as CEO. They soared to more than 80 euros before the 2008 financial crisis but fell back to around 23-24 euros when Lauvergeon left.
They were down 1.35 percent at 18.25 euros at 1518 GMT, while the CAC 40 index was down 0.6 percent.
At the time of the 2007 acquisition, Lauvergeon described the deal as "a major step in Areva's ambitious plan to increase its uranium production".
Uranium prices subsequently fell and UraMin's reserves, mostly in southern and central Africa, turned out to be lower than initially estimated, forcing Areva to take a writedown of close to 1.9 billion euros over the years 2010 and 2011.
Areva did an internal audit into the deal after the departure of Lauvergeon, who was replaced by Luc Oursel in June 2011. The audit pointed to shortcomings in corporate governance and information but did not reveal fraud or question the reliability of the company's accounts.
It did underline that Areva had paid dearly for UraMin, that management had underestimated the risks linked to the acquisition and that presentations made to state holding company APE and to Areva's board had not given enough prominence to the doubts that the internal technical teams had expressed.
Le Monde also wrote that the ongoing investigation was a key reason for the fact that Lauvergeon - a former aide to the late socialist President Francois Mitterrand - had not been selected to be part of the new socialist government of Prime Minister Manuel Valls.
At the time of the acquisition, Oursel was a member of Areva's board and the head of its nuclear reactor unit.
At the presentation of Areva's 2013 earnings in February, Oursel told Reuters that UraMin's uranium mines in Africa had been mothballed, awaiting a recovery in uranium prices.
Uranium prices have fallen from all-time highs near $140 per pound in 2007 to as low as around $33 this year. (Reporting by Chine Labbe, Benjamin Mallet and Geert De Clercq; writing by Geert De Clercq; editing by Jane Baird)
