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No 10 backs gas 'rigging' probes
1:23pm Tuesday 13th November 2012 in Business Daily
DOWNING Street has called for a speedy inquiry into allegations that Britain's £300 billion wholesale gas market has been "regularly" manipulated by some of the big power companies.
Prime Minister David Cameron's official spokesman said claims of wrongdoing by a whistleblower, published in the Guardian newspaper, if true, were "totally unacceptable" and the regulator should come down "very hard" on those responsible.
"These are allegations. They are being investigated by the energy regulator and the financial services regulator," he said.
"Obviously, if there has been manipulation of the energy market, then action needs to be taken very quickly. People in this country deserve markets that are fair and if there has been wrongdoing, that is totally unacceptable and the regulator should come down on those people very hard."
His remarks were made after it was revealed that the City watchdog, the Financial Services Authority (FSA), and energy regulator Ofgem are both looking into the claims by whistleblower Seth Freedman, who worked at ICIS Heren, a company responsible for setting so-called benchmark prices.
Mr Freedman raised the alarm after identifying what he believed to be attempts to distort the prices reported by the company. The Guardian reported that Ofgem has been warned by ICIS Heren that it has seen evidence of suspect trading on September 28, the date that marks the end of the gas financial year.
Mr Freedman told BBC News: "Having spoken to traders and other market participants, it seems like manipulation is rife in the gas market and our claims are centring on a particular incident that occurred on a key date in the gas calendar, September 28, in which it seems that people were trying to manipulate our assessment of the market and that is what is being investigated now."
All six of the big energy companies have released statements denying any involvement.
Energy Secretary Ed Davey will make a statement to the House of Commons about the claims later.
He said earlier: "I am extremely concerned about these allegations and will be keeping in close touch with the regulators while they get to the bottom of this."
© Press Association 2012
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