According to information available to the paper, the investigation is related to the findings of an audit commissioned by the TEŠ owner, power utility HSE, from Pricewaterhouse Coopers (PWC).

The daily got confirmation from the Celje police administration that a criminal investigation at TEŠ is ongoing based on several reports lodged in the past year by anonymous and identified notifiers.

"They concern a variety of suspected wrongdoing in the managing of the TEŠ business system, including the project of the construction of generator 6," the police said, referring to the EUR 1.3bn investment.

The former boss of TEŠ, Uroš Rotnik, assured the STA today that he had not been contacted by any criminal investigator, while he insisted that there had been no irregularity in the management of TEŠ or TEŠ6.

Rotnik also denied Dnevnik's reporting that he had made a criminal report against the incumbent management of TEŠ and HSE, but he did say that he had filed a report against an unknown perpetrator.

He argued that the reports drawn up by TEŠ for the government had been changed by an unidentified person and then sent to the government.

Rotnik was sacked by TEŠ supervisors in November 2010 over the handling of the TEŠ6 project. TEŠ is owned by HSE, which in turn is in sole ownership of the state.

The audit by PWC found that the management and the supervisory board of TEŠ had failed to examine all key elements of the contract with France's Alstom in sufficient detail before approving the investment in generator 6.

The audit also found that the management and supervisors failed to properly assess the risks, while the contract for the construction included a price adjustment mechanism that only benefited Alstom.

The former management of HSE with Jože Zagožen at the forefront was found by PWC to have overstepped its powers by initialling the contract with Alstom, lacking a relevant mandate from the supervisory board of HSE.

Zagožen explained today that he and Viljem Pozeb of HSE conditionally initialled in June 2008 only the part of the contract between TEŠ and Alstom that concerns HSE's guarantee rather than the whole contract.

Conditional means that the initialling is valid if certain conditions for the signing of the contract are met, Zagožen said in response to Dnevnik's report.

Zagožen and Pozeb were empowered by the supervisory board of HSE on 12 June 2008 to sign a motion for the parent company's guarantee or bank guarantee for the deal once all the parameters are agreed.

"The HSE supervisory board's decision to approve the parent company's guarantee was taken after I left HSE. The supervisory board took a decision in September 2009 for a capital injection in TEŠ, which was a condition for the contract to become effective," Zagožen said.

The valid guarantee agreement was signed by the then general manager of HSE Borut Meh in October 2009, Zagožen noted, adding that the initialling does not mean signing the guarantee document, let alone the contract with Alstom.

The latest report comes as the new government is expected to decide whether it will go ahead with the project and secure EUR 440m in state loan guarantees. Reports say EUR 500m has already been spent on the project.