http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 12.78Change: 0.15
R/$ = 11.42Change: -0.02
Au 1292.85 $/ozChange: 2.15
Pt 1263.00 $/ozChange: -8.50
 
 
Note: Search is limited to the most recent 250 articles. Set date range to access earlier articles.
Where? With... When?








Start
 
End
 
 
And must exclude these words...
Close Main Search
Close Main Login
My Profile News Alerts Newsletters Logout Close Main Profile
 
Agriculture   Automotive   Chemicals   Competition Policy   Construction   Defence   Economy   Electricity   Energy   Environment   ICT   Metals   Mining   Science and Technology   Services   Trade   Transport & Logistics   Water  
What's On Press Office Tenders Suppliers Directory Research Jobs Announcements Contact Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Oct 03, 2008

R3,8bn fine won't impact our growth pipeline, Davies assures

Back
 
Luxembourg|Africa|Flow|Projects|Road|Sasol|Sasol Wax GmbH|Africa|Europe|Luxembourg|United States|EUR|Bank Account|Competition Law|Flow|Oil Industry|Paraffin Wax Subsidiary|Products|European Commission|European Court Of First Instance|European Union|Neelie Kroes|Pat Davies|Bearing|Reputation
|Africa|Flow|Projects|Road||Africa||||Flow|Products|||Bearing|
luxembourg|africa-company|flow-company|projects|road|sasol|sasol-wax-gmbh|africa|europe|luxembourg-country|united-states|eur|bank-account|competition-law|flow-industry-term|oil-industry|paraffin-wax-subsidiary|products|european-commission|european-court-of-first-instance|european-union|neelie-kroes|pat-davies|bearing|reputation
© Reuse this Sasol CEO Pat Davies expressed "profound regret" at the weekend that its European paraffin wax subsidiary, Sasol Wax GmbH, had violated European Union (EU) competition law, but said the group was robust enough to withstand the R3,8-billion (€318-million) fine and still continue with its ambitious growth pipeline.



The company planned to spend up to R17-billion on a range of projects between 2009 and 2012, the majority of which would be implemented in Southern Africa.

Speaking to the South African media for the first time since the group was fined for its leadership role in what has been dubbed the ‘paraffin mafia' - a wax cartel, involving the who's who of the oil industry, that operated for 13 years from 1992 to 2005 - Davies said it had made immediate provision for the fine, but he also provided a strong indication that the group was likely to appeal the ruling.

A final decision on whether or not Sasol would appeal, however, would only be made once the group had had sight of the full ruling.

Nevertheless, based on current information, the appeal would probably focus primarily on seeking a reduction in the penalty, based on the fact that Sasol had not only cooperated fully with the European Commission's (EC's) probe, but also given that it had unwittingly inherited the anticompetitive behaviour from the previous owner of the business. Davies stressed that none of the individuals implicated in the cartel currently worked for the 31 000-employee group.

However, regardless of the decision to appeal or not, the JSE-listed group would still have to deposit the full €318-million amount into an EC account within three months. Should it lodge an appeal, the money would be set aside in a locked, but interest-bearing, bank account for the duration of the appeal.

Therefore, even if Sasol were to be successful in overturning or reducing the fine, Davies acknowledged that the money would not be available to it for many years to come, especially given that appeal periods at the European Court of First Instance, in Luxembourg, could last for anywhere between 18 months and five years.

But Davies, who had returned from an investor road show in the US on Friday morning, insisted that the fine would not impact on its growth programme, although he said it had given the group renewed cause to tighten its due diligence and compliance-monitoring procedures.

"Fortunately, Sasol is a successful company. It has a strong balance sheet and generates a lot of cash flow," Davies said, adding that he did not, therefore, believe the "very substantial" fine would affect its growth programmes.

Shareholders Don't Like Bad News

He also indicated that, in his interaction with North American shareholders, an understand had been expressed about the outcome of the EC's case.

"Shareholders obviously don't like it - why would they like bad news. But they understanding it," Davies said, adding that the key concern has been whether there were further compliance concerns and whether the fallout was contained.

"We were able to confirm that this fine ends the investigation," Davies said.

However, Davies said it was premature to comment on whether Sasol would face any civil claims as a result of the ruling, adding only that it was communicating with its customers that might have been affected and was keen to do whatever it took to repair its damaged reputation.

But given that EU's Competition Commissioner Neelie Kroes argued that there was "probably not a household or company in Europe that has not bought products affected by this ‘paraffin mafia' cartel", civil cases could well arise.

Davies stressed that the infringement was reflective of a previous era in Sasol, but did not reflect on its contemporary policies and values. Sasol, he added, had always tried to learn from some of the "tough knocks" it had taken over the years and that this case would be no exception.

 

Edited by: Mariaan Webb
© Reuse this Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
 
Latest News
Updated 9 minutes ago Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
JSE-listed Hudaco Industries’ share price climbed nearly 16% on Friday afternoon as the company announced that it would bring an end to a years-long tax challenges with the South African Revenue Service (Sars). In a trading statement to shareholders, Hudaco revealed...
President Jacob Zuma
South Africa was open for more investment and the country offered investment opportunities that no “wise” businessperson should miss, President Jacob Zuma told captains of commerce and industry during the yearly Business Interaction Group meeting on the sidelines of...
More
 
 
Recent Research Reports
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
Real Economy Insight: Automotive 2014 (PDF Report)
This four-page brief covers key developments in the automotive industry over the past 12 months, including an overview of South Africa’s automotive market, trade figures, production and the policies influencing the sector.
 
 
 
 
 
This Week's Magazine
BRUCE BRADFORD The 3D printers have a clear upgrade path to eventually print in wood, ceramics and metal-alloys
Three-dimensional (3D) printers being sold in South Africa by electronics distributor Rectron currently print in two types of plastic, but have a clear upgrade path over the next five years to eventually print in wood, ceramics and metal-alloy materials, says Rectron...
The world’s two dominant commercial aircraft manufacturers, Airbus of Europe and Boeing of the US, both recently announced that they had made record aircraft deliveries in 2014. Boeing set a global record for the industry with 723 commercial aircraft delivered, while...
The Western Cape is shifting further into the renewable-energy space with the official opening of a factory specialising in solar inverters, a key component of solar photovoltaic (PV) plants. The investment in the manufacturing facility in Cape Town aims to boost the...
Business Leadership South Africa (BLSA) last month welcomed Cabinet’s establishment of a technical team war room to undertake various interventions to improve electricity supply security over the short- and medium-term, but added that the private sector also had a...
Despite a rapid rise in mobile connections and the economic and social benefits of such connectivity, more than half of the world ended 2014 unconnected. For this reason, industry commentators believe the biggest impact of mobile technology is still to come –...
 
 
 
 
 
 
 
 
 
Alert Close
Embed Code Close
content
Research Reports Close
Research Reports are a product of the
Research Channel Africa. Reports can be bought individually or you can gain full access to all reports as part of a Research Channel Africa subscription.
Find Out More Buy Report
 
 
Close
Engineering News
Completely Re-Engineered
Experience it now. Click here
*website to launch in a few weeks