ArcelorMittal’s South African unit today agreed to pay a Dollars 110 million fine for illegal price fixing, the “largest single” penalty imposed against an individual firm for anti-competitive behaviour in the country.
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The effect of this ArcelorMittal has agreed to pay a fine of $110 million – This is approximately 1.5 billion rand. The instalments are to be no less than R300-million per annum.
“AMSA has committed to a R4,64 billion capital expenditure over the next five years”.
In terms of ArcelorMittal SA’s agreement with the Competition Commission, the company will cap its ebit margin at 10% for flat steel products sold in SA, with a variation up to a maximum of 15% depending on market circumstances.
The settlement agreement follows a long-standing investigation into long and flat sheet steel producers in the country following complaints laid about the exorbitant prices of steel products.
The final deal makes provision for the company to be exempt from all other investigations now underway.
No interest will be levied for the first 18 months once the settlement has been made an order of the Competition Tribunal. The Commission referred its findings to the Tribunal for prosecution.
The scrap metal matter relating to allegations of price fixing by the company as a consumer of scrap.
Bonakele said the Commission’s penalty would send out a strong message against collusion and cartels in the industry as they were working to protect South African consumers against dominant firms, particularly on key industrial products.
“The Commission is delighted to bring an end to these longstanding proceedings”. Furthermore, AMSA has agreed to a number of steps relating to complaints against its pricing conduct without admitting that its pricing conduct constituted a contravention of South Africa’s Competition Act.
This fine was issued after the company admitted that they had been involved in cartels with regards to long steel and scrap metal.
“Thereafter, interest will be levied on the remaining outstanding balance at the prevailing interest rate prescribed by the minister of finance‚ now 10.5%”.
“Notwithstanding, in the light of the previous concerns regarding pricing and the company’s commitment to work with Government and all stakeholders to contribute to growth of the SA economy, the company has agreed to a pricing remedy for local flat steel products”, said ArcelorMittal.
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“We are pleased to announce that all outstanding matters have now been addressed and a settlement has been reached, finalising all pending matters against the company”, ArcelorMittal said in a statement.
