A group of independent auditors hired by Albania’s electricity distribution network operator Oshee sh. a. for its financial statements for 2014, has refused to give an opinion, noting inconsistencies, portal Balkan Insight reported.
The unaudited documents show that in 2014 revenues jumped to ALL 47.2 billion (EUR 337 million) from EUR 269 million in 2013. „Our responsibility is to give an opinion on the financial statements based on the auditing. We have conducted our auditing based on International Auditing Standards,“ says the auditors report, obtained by Balkan Investigative Reporting Network (BIRN) and published on September 2. „But we were unable to secure enough data to create a basis for this opinion,“ it adds.
Auditors noted disrepancies between the company’s billing system and its financial statements for 2014 that neither the management nor the auditors could explain. They said the company’s assets were not accurately registered in the national property register, claimed inventories were poorly kept and noted that conflicting claims from third parties were not satisfactorily resolved.
Answering a query from BIRN, Oshee said its problems were inherited from the time when the company was under the ownership of ČEZ Group. The fact that the auditors refuse to offer an opinion did not have to do with the accuracy of the financial data but with the fact that Oshee has been in negative territory for years and with the problem of unregistered assets of the company, Oshee said. The company added it was working on improving its inventory reports and on registering its properties but warned that the process would not be finished within this year.
Menwhile, the Organisation for Security and Cooperation in Europe (OSCE) said on September 15 that the report alleging wrongdoing by 36 Albanian members of parliament, prepared in October 2014 and recently leaked to the Lapsi.al website, „contained information circulating in the country and was not the official view of the organisation.“ The report claimed that the members of parliament, including current prime minister Edi Rama, the speaker of parliament Ilir Meta and former prime minister Sali Berisha, had accumulated hundreds of millions of euros through corrupt practices.
BIRN earlier reported a law firm has alleged that Albania’s speaker of parliament and former prime minister Ilir Meta received bribes from Debt International Advisory (DIA), a debt-collection company currently in dispute with Oshee in the Vienna International Arbitral Centre. The details emerged after in 2013 DIA filed its suit against Oshee, then named CEZ Shpërndarje. It is seeking EUR 130 million for breach of contract. A motion to dismiss the case, filed at the institution by Oshee’s lawyers, alleges Meta was one of the beneficiaries of a fraudulent payment of EUR 4.5 million by CEZ Shpërndarje to DIA in 2010 and 2011, the report said.
Oshee has has a troubled history since it was created back in 2007 as an independent company, by dividing up the distribution arm of the electricity corporation in order to prepare it for privatization. ČEZ, the electricity giant from the Czech Republic, bought the distribution back in 2009 but immediately claimed that the company’s financial statements had been rigged by the previous administration by inflating the rate of electricity consumption. ČEZ said the company had declared much lower electricity losses and thefts than had actually taken place. ČEZ failed to turn the company’s fortunes around and it accumulated heavy losses in the following years. It also had several disagreements with the Albanian energy regulator over its methods of purchasing electricity at inflated prices and over its financial statements.
An earlier investigation by BIRN found that ČEZ engaged in a fraudulent scheme to distribute bribes among Albanian officials. Albania nationalized its shares in the company in 2013 and then appointed its own management. Last October the government has started a major crackdown on electricity theft, imprisoning about 600 people within months.
In late August, Oshee said it bought 131.7 GWh of power for EUR 6.1 million to cover forseen losses for September, Top Channel reported. According to the company’s press release, four suppliers won the tender. Oshee said median cost was EUR 46.2 per MWh. The distribution operator is legally obliged to cover loses in the private market, while the Albanian Power Operator (KESH sh. a.) provides only the quantity consumed by families and businesses in the country.
