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The
Competition Tribunal ("the Tribunal") today announced that, in
terms of a consent order granted on 24 February 2011,
it has confirmed the settlement agreement ("the Settlement
Agreement") reached between the Competition Commission ("the
Commission") and Sasol Polymers, a division of Sasol Chemical Industries
Limited.
The
Settlement Agreement related to Sasol Polymers' existing propylene supply
contract with Safripol ("the Supply
Agreement"). On 12 August 2010,
the Commission referred a complaint to the Tribunal, in which it contended
that the pricing provisions of the Supply Agreement gave raise to indirect
price fixing between Sasol Polymers and Safripol.
The pricing provisions were, however, inserted into the Supply Agreement with
the knowledge of the then Competition Board in relation to the proposed
merger, in 1993, of the monomer, polymer and certain other chemicals
operations of Sasol and AECI Limited.
In
Sasol Polymers' view, any contravention of the Competition Act (Act 89 of
1998), as amended, (the "Act") as a result of the Supply Agreement
has its origins in these pricing provisions rather than any intention to
contravene the Act. Given the uncertainty surrounding the legal position
in relation to the pricing formula and the interpretation of section 4(1)(b) of the Act, it was considered prudent to settle
with the Commission by accepting that the Supply Agreement gave rise to
indirect price-fixing.
As
communicated in our press release on the 14th of December
2010,
in terms of this Settlement Agreement, Sasol Polymers has agreed to pay a
penalty of R 111 690 000, which was subject to confirmation by the Tribunal,
in full and final settlement of the Commission's allegations that the pricing
formula gave rise to indirect price fixing.
Sasol
Polymers and Safripol have also reached agreement
on the key terms that are to govern the future monomer supply relationship
between the parties, which we consider to be fully compliant from a
competition law perspective. Norbert Behrens,
the Group General Manager: Strategy and Planning at Sasol, said, "At
Sasol we are committed to comply with all legislation and hence to resolve
any competition law issues where possible. This matter is one of the
outstanding competition law issues and we are pleased that this matter has
now been resolved."
JSE
– SOL; NYSE – SSL
Sasol
Investor Relations
Tel.:
+27 (0)11 441 3321 / 3563
Financial
Adviser and Sponsor
Deutsche
Securities (SA) (Proprietary) Limited
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