(BN) Blackstone Global Says Carbon Loss Is Registry’s Cost (Update1)


Blackstone Global Says Carbon Loss Is Registry's Cost (Update1)
2011-01-20 16:50:08.357 GMT

(Updates with Blackstone comments from second paragraph.)

By Mathew Carr
Jan. 20 (Bloomberg) -- Blackstone Global Ventures, the
Czech carbon trader reporting the theft of about 7 million euros
($9.4 million) of permits, said the national registry OTE AS
that holds allowances should take responsibility for the loss.
The OTE registry in Prague is appointed by the national
government as custodian of the greenhouse-gas allowances, Nikos
Tornikidis, manager of Blackstone Global's carbon portfolio,
said in a telephone interview today. "It's got a fiduciary duty
toward us," he said. "Nobody breached our servers."
The alleged theft of 475,000 metric tons of allowances on
Jan. 18 and earlier incidents in Austria and Germany prompted
the European Commission, the Brussels regulator, to yesterday
halt registry operations across the 27-nation bloc, preventing
spot carbon trade for a week. Blackstone isn't affiliated with
the New York-based asset manager of that name. OTE officials
didn't answer calls seeking comment after office hours.
"We don't regard it as Blackstone Global Venture's loss,"
Tornikidis said from the company's base in Brno. "We regard it
as OTE's loss."
About 1 million European Union carbon allowances may be
missing from accounts in the Czech Republic, according to
preliminary estimates from managers of the nation's registry.
More than one company is missing permits, Zuzana Zahorovska, an
administrator at OTE, said today.

Daily Check

A colleague told Tornikidis yesterday morning of the
missing allowances after a daily check spotted the empty
account, one of several held by the company, he said. "We have
a policy to check our accounts every day," he said. "Nothing
was there. I was supposed to trade them in yesterday."
The carbon transaction occurred about noon on Jan. 18,
Tornikidis said. Whoever handled it may have had administrator's
rights in the registry to divert transaction-confirmation e-
mails that otherwise would have been sent, he said. The
allowances may have been transferred to accounts in Poland, then
Estonia and then Liechtenstein, he said.
It was "impossible" that the theft could have been made
by someone within Blackstone Global, with only two people
holding the passwords, Tornikidis said. The company doesn't
necessarily blame OTE employees for the incident, he said.
"It's a systematic fault," he said. "We as a company don't
see any wrongdoing on our side."

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--With assistance from Ewa Krukowska in Brussels. Editors: Rob
Verdonck, Mike Anderson

To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or

To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net