SCE&G’s new owner to pay $192M to shareholders

Dominion Energy, the owner of the former South Carolina Electric and Gas Corp., will pay $192.5 million to settle a federal class action lawsuit by shareholders who accused the electric and gas company of fraud after its failure to build a nuclear power plant in Fairfield County. 

The settlement includes $162 million in cash and $30.5 million in stock, plaintiffs’ attorney John Browne of Bernstein Litowitz Berger & Grossmann in New York said. The settlement is awaiting the court’s approval, which could come within a couple of weeks, Browne said.

The lawsuit alleged that executives of SCANA, the owner of the electric and gas corporation, drove up the price of its stock by issuing false and misleading statements to investors that omitted information concerning the progress, cost, and completion schedule of the multi-billion dollar nuclear construction project at V.C. Summer Nuclear Station outside of Columbia.

The executives repeatedly mislead investors through various press events, press releases, investor conference calls, meetings with public officials, and filings with the SEC and other regulatory agencies, about the true status of the project, which was facing serious design, construction, and cost problems.

“Defendants doubled down on their strategy of deception and misdirection by issuing SCANA produced promotional videos, press releases, and other public statements that created a fundamentally false and misleading impression to investors that the project was running smoothly within a reasonable budget and on schedule,” the complaint said. “Yet, as only recently disclosed to investors, for much of the nuclear project’s history, a formal construction schedule was never in place and costs were spiraling out of control.”

Because of the deception, SCANA shares traded at artificially inflated prices, and shareholders “suffered significant losses and damages,” the lawsuit says.

“We are really pleased with the settlement,” Browne said. “It’s good for Dominion, because they weren’t the ones who committed this fraud. They bought the company, and now they can move on.”