Austrian prosecutors open investigation linked to Vienna power company

The Austrian prosecutors' office has opened an investigation into Wien Energie, the Vienna power company that recently received state help with surging margin calls but whose trading in futures markets has been questioned by the finance minister. As power futures rocketed to new records above 1,000 euros ($1,000) per megawatt hour at the end of last month, the city-owned company and the city government appealed to the federal government for help in dealing with the cost of margin calls - amounts required for accounts to keep trading.

The Austrian prosecutors' office has opened an investigation into Wien Energie, the Vienna power company that recently received state help with surging margin calls but whose trading in futures markets has been questioned by the finance minister.

As power futures rocketed to new records above 1,000 euros ($1,000) per megawatt hour at the end of last month, the city-owned company and the city government appealed to the federal government for help in dealing with the cost of margin calls - amounts required for accounts to keep trading. The federal government granted an emergency credit line of 2 billion euros that has not yet been used because futures prices have since fallen sharply, to below 600 euros.

"We have launched an investigation against unknown perpetrators on suspicion of grossly negligent harm to creditors' interests," a spokesperson for the prosecutors' office that deals with economic crime and corruption said on Wednesday, when asked about reports of an investigation regarding Wien Energie. The person declined to elaborate. Wien Energie said it was aware of the investigation and fully cooperating with the authorities.

Since Austria set up the emergency credit facility for Wien Energie, more European power companies have appealed for state help, while national governments have announced measures to protect them in the event of a liquidity squeeze caused by rising margin calls as the war in Ukraine roils the market. In Austria, however, the issue has become a political battleground between Chancellor Karl Nehammer's conservatives leading the federal coalition government and Vienna Mayor Michael Ludwig's Social Democrats.

Conservative Finance Minister Magnus Brunner has said there are suspicions of "speculation" by Wien Energie on the futures markets, suggesting irresponsible trades. The company and the city government deny the accusation. ($1 = 1.0004 euros)

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)