DONGed in Denmark

Did you know that the largest energy company in Denmark (76% owned by the Danish State – for now) is named DONG (formerly Dansk Olie og Naturgas A/S)? That’s just the tasty opening tidbit to an interesting tale currently resounding within that country’s halls of power, as reported on the webpages of Denmark’s public broadcast company, DR (formerly known as Danmarks Radio).

The problem is, DONG needs money for further infrastructure investments. Fortunately, it seems to have found an outside investor willing to purchase an ownership stake. Unfortunately, that investor is rather too “outside,” as in from “outside” the country.

In today’s European Union that should not really be any sort of issue. Cross-border investments are supposed to be able to proceed unimpeded; indeed, public tenders are to be awarded blind to the nationality of the bidding companies (as long as they are from EU member-states).

Still, especially when it’s about the company that heats so many national homes – and in a cold Scandinavian climate – it’s natural to have a preference for business dealings with fellow nationals. That preference is further sharpened here from the fact that it’s no less than Goldman Sachs who is the foreign party lined up to do the investment. And wouldn’t you know it:

One of the [deal’s] points of criticism is that Goldman Sachs has placed the investment in a tax haven, so the State would lose tax receipts in connection with payment of dividends from profits.

The Vampire Squid doesn’t miss a trick!

OK, but the tale does not end there: four Danish pension funds have now collectively come up with the money to make the investment instead. But the problem is that their bid might simply be too late, maybe: it’s hard to interpret the rules here.

In any case, the Danish Finance Minister, Bjarne Corydon, will chair a meeting on Tuesday to make a decision. Goldman Sachs representatives likely expect things to be all arranged then, but Minister Corydon – and even the Danish PM herself, Helle Thorning-Schmidt – are getting pressure to go with the pure-Danish alternative, however last-minute. This lobbying is coming in particular from the Danish People’s Party, (in)famous for its generally ultra-nationalist policy stances and general contempt for the EU, but for all that still quite influential within Danish politics.

While hardly the most enthusiastic EU member-state, Denmark still has a good record for keeping to the rules. Here, though, the argument for national chauvinism seems strong, considering the counterparty.

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