April 2, 2014 / 10:56 AM / 4 years ago

UPDATE 2-Europe fines Goldman Sachs, cable firms over cartel

* Cartel ran for almost ten years from 1999

* Shares in Prysmian rise on lower than expected fine (Adds Goldman Sachs, Prysmian, EU antitrust chief comments)

By Foo Yun Chee

BRUSSELS, April 2 (Reuters) - U.S. investment bank Goldman Sachs, the world’s top cablemaker Prysmian, Nexans and eight other cable firms were fined a total of 302 million euros ($416 million) by European regulators for running a cartel.

The power cable cartel, made up of six European companies, three Japanese and two Korean firms, ran for almost 10 years from 1999, with the companies sharing markets and allocating customers between themselves, the European Union’s antitrust authority said on Wednesday.

Prysmian received the biggest penalty from the EU at 104.6 million euros, which included a joint fine of 37.3 million euros with Goldman Sachs. The bank acquired the Italian company via one of its private equity funds in 2005 but has since sold its holding.

Prysmian said it would appeal against the European Commission’s decision, as did Danish company NKT Holding which received a much smaller fine. Goldman Sachs said it may challenge the ruling.

The Italian company said it “believes that the decision is based on a superficial and erroneous analysis of the relevant facts and, therefore, considers the decision unlawful.”

Its shares rose more than 3 percent because the fine was less than the 199 million euros the firm had set aside to pay it.

European Competition Commissioner Joaquin Almunia said Goldman Sachs played an active management role at Prysmian during the cartel years.

“We had evidence during our investigation of the direct involvement of Goldman Sachs in the management decisions of the company Prysmian,” he told a news conference.

Goldman Sachs said: ”It is important to recognize that the Commission has chosen to hold GS jointly and severally liable with Prysmian solely under its parental liability doctrine.

“Notably, there is no suggestion that Goldman Sachs or its people had any knowledge or involvement in the purported collusive behaviour.”


Authorities in Japan, South Korea and Australia have already levied million-dollar fines against cable companies for anti-competitive practices, and the United States Department of Justice is also investigating the industry.

The EU watchdog handed a 70.7 million euro fine to French cable manufacturer Nexans, which said it would consider an appeal.

Denmark’s NKT Holding was fined 3.9 million euros.

“We do not believe that there is evidence in the Commission’s allegations. We have not in any way been involved in any form of cartels. Therefore, we disagree with the decision and we will appeal,” Chief Executive Michael Lyng said.

France’s Safran, fined 8.6 million euros, said this would not have a significant impact on its results as it had set aside a provision.

Other cartel members include Japan’s Exsym Corporation and J-Power Systems Corporation and Korean peer LS Cable & System . None of the Asian companies were immediately available to comment outside normal business hours.

Swiss engineering firm ABB alerted the Commission to the cartel and, as a result, escaped a fine.

For a full list of the companies fined by the European Commission, click here

$1 = 0.7249 Euros Additional reporting by Ole Mikkelsen in Copenhagen, Francesca Landini and Massimo Gaia in Milan and Brian Love in Paris; Editing by Erica BillinghM

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below