SASOL & EXCEL in trouble

[Sieg]

This is from today’s iafrica.com website:

Price scandal hits Sasol
Article By: Sherilee L Bridge
Wed, 01 Oct 2008 12:56

Sasol, the world's largest fuel from coal producer, is among nine firms that were on Wednesday fined a total of €676-million or R7.9-billion by Europe's antitrust watchdog the European Commission (EC) for participating in a paraffin wax cartel.

"Sasol's fine was increased by 50 percent because it was the leader of the cartel," the EC said in a statement.

According to the document, Sasol will have to pay the largest fine of €318.2-million or R3.7-billion.

The other producers are Shell in UK and Netherlands, Spain's Repsol, the US's ExxonMobil, Italy's ENI, German company Tudapetrol, Hansen & Rosenthal, Hungary's MOL, German company RWE and France's Total.

Calling the cartel the "paraffin mafia", the European Union's Competition Commission found that from 1992 to 2005, the producers of paraffin waxes and slack wax "operated a cartel in which they fixed prices for paraffin waxes".

Companies held regular meetings

"ExxonMobil, MOL, Repsol, Sasol, Shell and Total also engaged in market allocation for this product and ExxonMobil, Sasol, Shell, RWE and Total also fixed prices for slack wax sold to end-customers on the German market," the EC said in its official notice of its findings.

It said the companies held regular meetings to discuss prices, allocate markets and/or customers and to exchange sensitive commercial information.
The cartel constitutes "a very serious infringement of EC Treaty antitrust rules" and in setting the fines, the commission took into account the respective affected sales of the companies involved as well as the combined market share and the geographical scope of the cartel agreements.
"There is probably not a household or company in Europe that has not bought products affected by this 'paraffin mafia' cartel, with all that implies in terms of paying over the odds, higher costs and economic damage," said Competition Commissioner Neelie Kroes.

"Such illegal cartel behaviour cannot and will not be tolerated by the Commission, and companies' managers and shareholders should take note," he said.

The EC said cooperation with the investigation of three groups under the commission's leniency programme was also rewarded.

Sasol, Repsol and ExxonMobil were granted a reduction of their fines of 50 percent, 25 percent and seven percent respectively, it said.

I-Net Bridge

My comments:

The “paraffin mafia”, I like that. The same Sasol that only wants to have “blacks” as its shareholders.

Now, if they have been colluding to fix the prices here in SA, then surely the Competition commission should be investigating and pursuing SASOL?

Sieg

[Dave A]

Ouch! That's a fair chunk of change out of the bottom line.

[Dave A]

Let the negotiating begin...

Sasol on Friday accepted accountability for the anti-competitive behaviour that led to an approximately R3-billion fine for paraffin-wax price-fixing in Europe, but it intended to appeal.

"I need to make it very clear that we don't distance ourself from accountability on this," said Sasol chief executive officer Pat Davies.

However, the company would like to get details on how the European Commission (EC) concluded the matter to establish whether it was indeed a leader in the nine-company cartel as alleged, and to see whether the size of the fine was appropriate.
full story from M&G here

Be kinda cool if it could be negotiated that the fine (whatever it might end up being) gets ploughed back into the SA economy.

[duncan drennan]

Be kinda cool if it could be negotiated that the fine (whatever it might end up being) gets ploughed back into the SA economy.

Do the local competition commission fines get ploughed back in the SA economy? It has bothered me for a while, what DOES happen to that money (locally)?

[Graeme]

Collusion

The way I hear it, the cartel/collusion began before SASOL purchased the European wax company. Of course that does not let them off the hook, the collusion should have been spotted when they did the due dilligence investigation prior to purchase.

It is significant that the whistle was blown by Shell, one of SASOL's competitors in the wax business. Shell does not come to this with clean hands.

I have been caught twice by this sort of thing (the other one was Tiger Brands) - it would seem to me to be necessary now for shareholders to pose a standard question at all company annual general meetings: "Mr Chairman, will you please assure this meeting that this company has not entered into any collusive practices". By so doing the chairman would thereafter be open to a class action lawsuit should collusive practices occur!

[Martinco]

And what about fertilizer that has escalated about 300% over the last year ? Also made by Sasol ! Could the "Fertilizer Mafia" be involved ?