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Individual RWE Group companies are involved in litigation and arbitration proceedings due to their operations or sale of companies, and out-of-court claims have been filed against some of them. However, we do not expect any major negative repercussions on the RWE Group’s economic or financial position. Furthermore, Group companies are directly involved in various procedures with public authorities or are at least affected by their results.
Raw materials production and power generation activities might be curtailed by risks arising from approval processes for our opencast mines and nuclear power plants. Furthermore, there is a risk of financial loss when capital is spent on the construction of power plants in the run-up to local planning decisions made by public authorities. We take precautionary measures against this by preparing our applications for approval with great care and ensuring that approval processes are handled competently. In light of our extensive growth programme and numerous investments in replacement plants, the number of our ongoing approval processes is especially high at present.
In the German end-customer business, we are affected by legal procedures concerning the effectiveness of price mechanisms. This may result in burdens for us.
In May and December of 2006, the EU Commission conducted follow-up inquiries at several energy companies throughout Europe. This affected RWE AG and other RWE Group companies in Germany. The EU Commission then filed requests with companies including RWE for information on individual energy market issues. Risks may arise from the investigations, some of which are still ongoing.
Conciliation proceedings in connection with the legal restructuring of companies are currently pending. They were initiated by outside shareholders in order to examine the appropriateness of the conversion ratios and the amount of cash paid in compensation. In our opinion, associated risks are low, as the conversion ratios and cash compensation were calculated by independent experts. If a different legally enforceable decision is reached, the compensation will be carried out by making an additional cash payment to the affected shareholders, including those who are not directly involved in the conciliation proceedings.
