The allegation relates to Vattenfall’s acquisition in 2009 of Dutch company Nuon.
In a statement, Vattenfall president Lars G Nordstrom said the company wanted to “once and for all clarify whether there is any substance in the rumor that Oystein Loseth would receive any additional compensation in connection with the acquisition of Nuon.”
“We want to be able to have full confidence that the matter is thoroughly investigated,” he added.
Loseth (pictured) welcomed the probe, saying it would “put an end to this rumor”.
The investigation will be carried out by lawyer Christer Danielsson, who is said to be of the most in-demand arbitrators in Europe.
Nordstrom said: “Christer Danielsson is an extremely qualified lawyer and lives up to all the demands for impartiality that can be expected to arise in this context.”