5 Arrested In Italy In British Gas Probe

ROME – Italian police arrested five people Monday, including a local British Gas manager, in a corruption probe into the construction in southern Italy of a gas plant by BG Group PLC.

The five were arrested at dawn by police across Italy, and include the current chairman of BG Italia, the group’s Italian arm, and two former managers, according to financial police in the southern port town of Brindisi.

Prosecutors believe chairman Franco Fassio, former chairman Yvonne Barton and former CEO Fabio Fontana paid bribes to local administrators to speed up the go-ahead for the construction of the liquefied natural gas terminal in Brindisi, police Maj. Massimiliano Tibollo said.

Barton, who is British, and Fontana were placed under house arrest, while Fassio was jailed along with a former Brindisi mayor and a local businessman. Police also conducted 52 searches across Italy and seized the terminal’s construction site, Tibollo said.

The Italian government authorized the project in 2003 and the British gas company had previously said it planned to start up the terminal in 2009.

‘As far as we are concerned we had the full and valid authorization,’ BG spokesman Neil Burrows said.

He said Barton left the company in 2002 and Fontana in 1999, but had no details on the circumstances of their departure.

BG had cooperated with the Italian probe and would continue to do so, Burrows said, adding that the company had received a document relating to the investigation from Italian authorities which it was reviewing.

Burrows said it was too early to comment on Fassio’s future with the company.

Local authorities have fiercely opposed the Brindisi terminal, which the government insists is needed to reduce Italy’s dependence on oil and boost its capacity to import gas.

Italy suffered a gas shortage last winter after a Russian price dispute with Ukraine led to a cut in supplies to some European countries. Terminals like the one planned in Brindisi increase supply by converting back into gaseous form liquid gas that is brought in by ships.

‘If we want to go ahead with gas we need the infrastructure, and a reasonable number of these plants must be built in Italy,’ Industry Minister Pier Luigi Bersani said.

Italian energy analyst Davide Tabarelli said the case is likely to scare away foreign companies wishing to invest in Italian infrastructure, particularly in the underdeveloped south, he said.

‘British Gas was ready for this investment and it was an investment that would have benefited Italy,’ he said. ‘It just doesn’t work. It will be another terrible example of an attempted investment in Italy.’

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5 arrested in Italy in British Gas probe