March 25, 2016 / 3:21 PM / 3 years ago

CNH takes $500 mln charge over EU cartel probe

MILAN, March 25 (Reuters) - Truck and tractor maker CNH Industrial said it was booking a $500 million charge in relation to a European Commission cartel investigation that could lead to heavy fines for some of the world’s biggest truckmakers.

In a statement late on Thursday, CNH said it had decided to book the charge in the first quarter of this year “based on recent developments,” without elaborating.

“The company will continue to evaluate the amount of the charge pending final resolution of the investigation and related matters. The company has sufficient liquidity to fund a payment in the amount of the charge,” it said.

The investigation concerns CNH’s unit Iveco as well as other truckmakers. CNH is the fourth company targeted by the probe to have taken a charge in relation to the wide-ranging EU investigation, which began with raids on a number of companies’ headquarters in January 2011.

Volvo has set aside a provision of 400 million euros ($447 million), while Daimler has booked a charge of 600 million euros.

Paccar Inc said on Thursday it would record a charge of 850 million euros in the first quarter.

The Commission said in November 2014 it had sent formal charge sheets to several manufacturers it suspected of price fixing.

Back then, Daimler, Volvo and CNH Industrial all confirmed receipt of the European regulator’s so-called statements of objections, together with Volkswagen-controlled Scania and MAN.

Companies can be fined up to 10 percent of their annual revenue if the Commission concludes there is sufficient evidence of an infringement of EU rules barring cartels and the abuse of market dominance.

The total fine could be substantial because the alleged wrongdoing stretched over 14 years, according to the EU charge sheet seen by Reuters.

CNH said the $500 million charge would be accounted for as an exceptional item and was not expected to be tax deductible.

$1 = 0.8957 euros Reporting by Silvia Aloisi, Additional reporting by Foo Yun Chee in Brussels; Editing by Mark Potter

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