Polish state-owned coal company Kompania Weglowa vetted by prosecution

District Prosecution in Katowice launched an official investigation into the alleged mismanagement of funds by Polish coal incumbent Kompania Weglowa (KW) connected to a contract signed with PGE, Poland’s largest power producer, stipulating delivery of coal to two power blocks of the planned Power Station Opole, the Polish media reported in October 2013.

“It has been concluded that there are grounds for launching an investigation into the suspected mismanagement of funds in Kompania Weglowa,” Marta Zawada-Dybek, spokesman of the prosecution in Katowice, told Polish daily Dziennik Gazeta Prawna on October 7.

The investigation was launched after a tipoff from Wojciech Kotlarek, the former vice-CEO of KW, who according to the Polish daily claimed that the contract for delivery of coal to PGE was detrimental to KW.

The contract, estimated to be worth PLN 16-22 bln, was signed in August 2013 by KW CEO Joanna Strzelec-Lobodzinska and Vice-CEO Krzysztof Brejdak, when Kotlarek was on holiday. For the first time in its history KW agreed to setting prices based on market parameters. Such a solution is beneficial to PGE because it secures petrol prices at predictable levels, but it reportedly could result in KW selling coal for less than the operating costs of extraction.

Based on off-the-record statements by company representatives, the contract was drafted hastily due to immense political pressure coming from Polish Prime Minister Donald Tusk, who allegedly stated that the construction of the two power blocks should begin as soon as possible.

The decision to level charges at individuals or discontinue the investigation should follow within the next two-three months.