Marcia Klein
Marcia Klein
Sasol is mulling over its options after the European Commission slapped it with a ß318,2million (R3,7billion) fine and branded it as the leader of a "paraffin mafia".
The fine relates to anti-competitive behaviour by Hamburg-based Sasol Wax and eight other members of the European paraffin wax industry.
The nine companies were fined a total of ß676million for forming a cartel and violating antitrust laws. This was the fourth highest fine ever imposed by the commission.
Sasol said it was "surprised and does not understand the reasons for the magnitude of this fine and will be studying the reasons for the finding with a view to lodge an appeal".
The commission said Sasol was granted a 50percent reduction under its leniency notice, and would pay a fine of ß318,2million, indicating that its initial fine was ß636,4million (R7,4billion). According to Sasol, the fine was reduced by 50percent due to its "cooperation and support in the investigations".
The Sasol 2007 annual report shows that its wax operations had a turnover of R5,6billion and operating profit of R629million. The fine, therefore, appears to be relatively onerous.
Paraffin is used in many products including candles, waxed paper, tyres, gum, paper plates, and the wax coatings around cheese.
Competition Commissioner Neelie Kroes said: "There is probably not a household or company in Europe that has not bought products affected by this 'paraffin mafia' cartel, with all that it implies in terms of paying over the odds, higher costs and economic damage. Such illegal cartel behaviour cannot and will not be tolerated by the commission, and companies' managers and shareholders should take note."
Sasol said it was "unaware of these infringements before the European Commission commenced their investigation at the wax business in Hamburg in 2005". The commission said the infringements started in 1992 or earlier.
Sasol said it became a co-shareholder of the wax business in Hamburg in 1995 and bought the remaining shares in 2002.
Sasol has now "intensified its competition and anti-trust law compliance programmes in all its businesses".
The commission said that Shell did not get fined as it blew the whistle. But Total, Exxon Mobil, RWE, ENI, Hansen & Rosenthal, MOL, Repsol and Tudapetrol were all fined.
Following the news, the Sasol share price dropped 5,12percent to R332 yesterday.
Sasol must pay R3,7bn
Marcia Klein
Marcia Klein
Sasol is mulling over its options after the European Commission slapped it with a ß318,2million (R3,7billion) fine and branded it as the leader of a "paraffin mafia".
The fine relates to anti-competitive behaviour by Hamburg-based Sasol Wax and eight other members of the European paraffin wax industry.
The nine companies were fined a total of ß676million for forming a cartel and violating antitrust laws. This was the fourth highest fine ever imposed by the commission.
Sasol said it was "surprised and does not understand the reasons for the magnitude of this fine and will be studying the reasons for the finding with a view to lodge an appeal".
The commission said Sasol was granted a 50percent reduction under its leniency notice, and would pay a fine of ß318,2million, indicating that its initial fine was ß636,4million (R7,4billion). According to Sasol, the fine was reduced by 50percent due to its "cooperation and support in the investigations".
The Sasol 2007 annual report shows that its wax operations had a turnover of R5,6billion and operating profit of R629million. The fine, therefore, appears to be relatively onerous.
Paraffin is used in many products including candles, waxed paper, tyres, gum, paper plates, and the wax coatings around cheese.
Competition Commissioner Neelie Kroes said: "There is probably not a household or company in Europe that has not bought products affected by this 'paraffin mafia' cartel, with all that it implies in terms of paying over the odds, higher costs and economic damage. Such illegal cartel behaviour cannot and will not be tolerated by the commission, and companies' managers and shareholders should take note."
Sasol said it was "unaware of these infringements before the European Commission commenced their investigation at the wax business in Hamburg in 2005". The commission said the infringements started in 1992 or earlier.
Sasol said it became a co-shareholder of the wax business in Hamburg in 1995 and bought the remaining shares in 2002.
Sasol has now "intensified its competition and anti-trust law compliance programmes in all its businesses".
The commission said that Shell did not get fined as it blew the whistle. But Total, Exxon Mobil, RWE, ENI, Hansen & Rosenthal, MOL, Repsol and Tudapetrol were all fined.
Following the news, the Sasol share price dropped 5,12percent to R332 yesterday.
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