Top executives arrested in Italy wind farm probe

Italian finance police, mounting an operation code named "Gone with the wind", yesterday said they had arrested two of the country's most prominent businessmen in the wind energy sector.

Police said the charges related to fraud involved in obtaining public subsidies to construct wind farms. They are also investigating the sale of wind farms to foreign companies.

Oreste Vigorito, head of the IVPC energy company and president of Italy's National Association of Wind Energy, was arrested on Tuesday in Naples. Vito Nicastri, a Sicilian business associate, was arrested in Alcamo, Sicily.

Two other men were arrested in Sicily and the Naples area, while 11 others were charged but not arrested.

IVPC, a leading constructor and operator of wind farms in Italy, did not return calls asking for comment. Mr Vigorito is also well known as president of the Benevento football club.

"Gone with the wind", mounted by the finance ministry's anti-fraud police, started in 2007 and began by blocking public subsidies worth €9.4m ($14m, £8.4m) granted by the ministry for economic development. Last year police confiscated seven wind farms with 185 turbines in Sicily linked to IVPC.

Anti-Mafia prosecutors in Sicily have launched a parallel investigation. The Financial Times was told in April that a large number of wind farms had been built with public subsidies but had never functioned.

Police said yesterday they had sent requests for documentation to five foreign companies - two in the Netherlands and three in Spain - that were linked to IVPC. Other companies in Ireland and the UK, said to be Italian affiliates of IVPC, have been asked by Italian authorities to provide information.

Police also said they were carrying out checks on 12 companies in Italy, including nine with company names that are variations of IP Maestrale and which share the same street name and number as IVPC in Avellino, near Naples.

International Power of the UK, the largest operator of wind farms in Italy last year with a market share of about 15 per cent, said it owned the IP Maestrale companies.

International Power acquired its Maestrale portfolio of wind farms in 2007 for €1.8bn from Trinergy, an Irish company that had bought them from IVPC two years earlier. Some of the projects had been developed by Mr Nicastri, although IP told the FT in April it had no direct relationship with him.

International Power, which has not been charged with any wrongdoing, said in London yesterday: "We are aware of the arrests made in Italy yesterday. Criminal proceedings in Italy are conducted on a confidential basis and we will not make any comment on either the arrests or the individuals involved at this time."

Mr Nicastri told the FT in April he had developed the "majority" of Sicily's wind farms. He had then sold some of the projects to IVPC for further sale to foreign companies.

All were functioning, he said at the time. His office declined to comment yesterday.