Power chief threatens to sue

National Power may sue the Government over the sale in March of its remaining stake in the company. The company believes that the Government had information which, if widely known, would have affected the price. National Power spent £453m buying 100 million of its own shares but says it may have needed to spend less had all the facts been known.

The Government had advance warning that Offer, the regulator, would make a statement on electricity prices after dealings in the shares began. The statement sent shares in the sector plunging and enraged investors who had just bought stakes in the generators.

The Stock Exchange said last night it is still considering the circumstances surrounding the £4bn sale of shares in both National Power and PowerGen. A spokeswoman said that the Exchange has completed its enquiries and "is now discussing with the appropriate regulatory bodies how the matter can best be taken forward".

John Baker, the National Power chairman, said: "The price might have been different - that is lower - if the market had known what would happen. The company is considering whether it has recourse to the Government over the price of the share repurchase."

"We have put the Treasury on notice that we are considering our position. It is a matter we will need to bottom out in the light of advice we receive," he added. Mr Baker insisted that the company is not going "gung-ho" for the Government but that the board is acting according to its responsibilities.

Mr Baker said that he was "totally pole-axed" when he heard about the announcement by Professor Stephen Littlechild, director general of Offer, that he would again review electricity distribution prices in England and Wales only months after five-year price caps had been agreed. The about-turn undermined investor confidence in the regulated utilities and enraged those who had just bought shares.

The Government was aware there would be a statement on prices the Friday before dealings began but went ahead with the sale. "If I had been aware I would have put that information into the public domain unequivocally. I think we should have been told," Mr Baker said.

His attack came as National Power announced a 16 per cent jump in pre- tax profits to £735m in the year to 31 March. Earnings per share rose by 17 per cent to 43.6p and the dividend is increased by 24 per cent to 15.45p. The results were ahead of City expectations and were described by one analyst as "hugely good".

The shares rose by 2p to 467p compared with the price of 460p paid in the share buyback. The Treasury said that having taken legal advice, it believes there is no basis for revising the amount paid for the shares in the March sale.

National Power's results herald a season of hefty profits from the sector. The 12 regional companies are expected to announce pre-tax profits totalling about £2.2bn for the year, up from £1.8bn in 1993/94.

Mr Baker said: "The results reflect our efforts now sustained over four years to improve the efficiency of our operations to drive out costs and to find better ways of doing things."

National Power shed 1,000 jobs over the 12 months, bringing the workforce to 5,000 and said that numbers in the core electricity business will continue to "drift down". The company is expecting to create jobs as it continues its expansion drive overseas. Market share fell to 34 per cent during the year compared with 46 per cent five years ago.

Mr Baker warned that regulatory uncertainty continues to overhang the business. The company has been told by Offer to sell 4,000 megawatts of generating capacity - equivalent to two large power stations - or face being referred to the Monopolies and Mergers Commission. National Power is in talks with several groups about selling power plants but is also considering a demerger of stations into a separate company within the group.

FootballGerman sparks three goals in four minutes at favourite No 10 role
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
A long jumper competes in the 80-to-84-year-old age division at the 2007 World Masters Championships
Radamel Falcao was forced to withdraw from the World Cup after undergoing surgery
premier leagueExclusive: Reds have agreement with Monaco
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
New Articles
Life and Style
Couples have been having sex less in 2014, according to a new survey
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam