03 October 2008 15:25 [Source: ICIS news]
LONDON (ICIS news)--Sasol’s operating profits for the first half of 2009 will take a hit as the company said on Friday it will make immediate provisions of rand (R) 3.8bn ($447m/€325m) to pay for a €318m fine imposed by the EU for its involvement in a paraffin wax cartel.
A spokesman for the South African producer said there had been made no previous provisions, as the company did not know how large the fine was going to be, but added Sasol had a strong cash flow.
Earlier this week, nine producers were fined a total of €676m for operating a pricing cartel between 1992 and 2005, holding regular meetings to discuss prices and allocate markets and customers.
Sasol received the largest fine of as the European Commission branded it the leader of the cartel. It has three months to pay the fine.
“While a fine was expected, we didn’t anticipate the magnitude of the fine, particularly in the light of, amongst other factors, not being the legacy owner,” the company said in a statement.
Sasol said it was unaware of the activities of its wax business in Hamburg, Germany, of which it had been a co-shareholder in with the Schumann group since 1995, adding once it became aware it put a halt to the activities and cooperated fully with the Commission.
“We do not yet have the detailed reasoning from the EC and will study it, as soon as it is supplied, to clarify our next steps. As we see things now, it is our intention to appeal,” it added.
“We regret that this has occurred in one of Sasol’s subsidiaries and that our due diligence and compliance programmes failed to identify this anti-competitive behaviour, when we acquired the business 13 years ago and thereafter,” said Sasol CEO Pat Davies.
“The past actions of but a few former employees has resulted in serious damage to our company’s reputation and that affects each one of us,” he added.
“We wish to assure our employees, shareholders and our customers that there is no place at Sasol for illegal activities and we will vigorously root out any impropriety,” Davies said.
($1 = €0.72/$1 = R8.49)
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