NUI Energy Brokers Inc. (NUIEB), the wholesale energy trading subsidiary of Bedminster, NJ-based NUI Corp., has agreed to pay the state of New Jersey $500,000 after pleading guilty to misconduct by a corporate official for transferring funds away from NUI’s utility subsidiaries as part of a gas purchasing program. In a separate agreement with the state on Wednesday, NUI Corp. agreed to fund and operate certain community service programs because of the misconduct.

Last November, NUI Corp. received a subpoena from the state attorney general regarding “certain questionable transactions” at its wholesale trading operation. The parent company, its utility subsidiaries and trading business already were under investigation by the New Jersey Board of Public Utilities (NJBPU) because of credit ratings downgrades, unattainable financial promises to shareholders and questions about the relationship between its utility subsidiaries and nonregulated businesses.

“When I joined the company, the NUI board made it clear that we were to conclude the various investigations into the company and proceed with the sale process,” said CEO Craig Matthews on Wednesday. Matthews was brought onboard from KeySpan in January to direct the sale of the company.

“These agreements with the New Jersey state attorney general and the settlement with the New Jersey Board of Public Utilities brings closure to the investigations by these parties of the company’s energy trading business. The completion of these investigations should help facilitate the sale of the company.”

The investigations, financial trouble and a market downturn last year forced the company put itself on the auction block last fall. CEO John Kean Jr. resigned in September and the NUI board concluded that a sale was in the best interests of shareholders (see Daily GPI, Sept. 29). NUI expects to sign a definitive agreement with a purchaser of the company in the third quarter of calendar 2004.

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