http://www.engineeringnews.co.za
  SEARCH
Login
R/€ = 17.01Change: 0.00
R/$ = 14.89Change: 0.02
Au 1292.93 $/ozChange: 16.11
Pt 1081.00 $/ozChange: 19.50
 
 
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 Letters About Us
 
 
 
RSS Feed
Article   Comments   Other News   Research   Magazine  
 
 
Oct 03, 2008

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

Back
 
 
 
 
 
 
Africa|Business|Flow|Projects|Road|Africa|Flow|Products|Bearing
Africa|Business|Flow|Projects|Road|Africa|Flow|Products|Bearing
africa-company|business|flow-company|projects|road|africa|flow-industry-term|products|bearing
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
Creamer Media Senior Researcher and Deputy Editor Online

To subscribe email subscriptions@creamermedia.co.za or click here
To advertise email advertising@creamermedia.co.za or click here
 
Comment Guidelines (150 word limit)
 
 
 
 
 
 
 
 
 
Latest News
Necsa chairperson Dr Kelvin Kemm
Updated 2 hours 41 minutes ago The general perceptions, often misinformed, surrounding nuclear development and South Africa’s nuclear programme need to be unpacked and clarified, so that citizens can make their own informed decisions, rationally, around the subject, industry proponents urged on...
Updated 2 hours 53 minutes ago South Africa launched its third National Action Plan (NAP) on Friday, which includes a high-level commitment to creating a public register of beneficial ownership information. The NAP was part of the Open Government Partnership (OGP) discussions, which were held in...
Labour Minister Mildred Oliphant
Updated 3 hours ago Trade union Solidarity has called on Labour Minister Mildred Oliphant to urgently intervene in the matters of the ailing Bargaining Council for the Metal and Engineering Industry (MEIBC). This was owing to the ongoing financial crisis facing the bargaining council,...
More
 
 
Recent Research Reports
Energy Roundup – May 2016 (PDF Report)
The May 2016 roundup covers activities across South Africa for April 2016 and includes details of the National Energy Regulator of South Africa’s proposal to introduce a coal benchmark cost as part of its final decision on Eskom’s multiyear price determination...
Automotive 2016: A review of South Africa's automotive sector (PDF Report)
Creamer Media’s Automotive 2016 Report provides an overview of South Africa’s automotive industry over the past 12 months. The report provides insight into local demand and production, vehicle imports and exports, investment and competitiveness in the sector, as well...
Energy Roundup – April 2016 (PDF Report)
The April 2016 roundup covers activities across South Africa for March 2016 and includes details of a North Gauteng High Court Judge’s dismissal of a court application to postpone the 9.4% electricity tariff increase, which the National Energy Regulator of South...
Electricity 2016: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2016 report provides an overview of South Africa’s electricity sector, focusing on State-owned power utility Eskom and independent power producers, electricity planning, transmission, distribution and the theft thereof, besides other issues.
Energy Roundup – March 2016 (PDF Report)
The March 2016 roundup covers activities across South Africa for February 2016 and includes details of the Department of Energy’s plans to announce the preferred bidders for the first tranche of the coal independent power producer procurement programme; the Council...
Steel 2016: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2016 Report examines South Africa’s steel industry over the past 12 months. The report provides insight into the global steel market and and particularly into South South Africa’s steel sector, including production and consumption, main...
 
 
 
 
 
This Week's Magazine
Following the drop in commodity prices and China’s demand for Africa’s resources, African economies were slumping and gross domestic product growth was stagnating in most of the continent’s emerging markets, said the New Partnership for Africa’s Development, or...
The New Development Bank, a multilateral lender formerly known as the Brics Development Bank, will provide $811-million in a first round of loans for clean energy projects in four nations.
South African car and bakkie exports into Africa declined for the third year in a row in 2015, falling from 79 228 units in 2012, to 77 589 units in 2013, 60 189 units in 2014, and 41 446 units last year – this according to the Automotive Industry Export Council’s...
Networking systems multinational Cisco is training 75 people as part of a pilot project to develop specialist networking skills in South Africa, says Cisco South Africa CTO Vernon Thaver. The trainees were nominated by and selected from Cisco’s local partners and...
The threat landscape is changing, along with technologies, impacting on new fields, such as industrial infrastructure, which is becoming increasingly connected. Smart cities are also developing fast through connected devices, Web services and cloud solutions, but...
 
 
 
 
 
 
 
 
 
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
Subscribe Now for $149 Close
Subscribe Now for $149