|
SOL
SOL
SOL - Sasol Limited - Sasol polymers` settlement of section 4 complaint
Sasol Limited
(Incorporated in the Republic of South Africa)
(Registration number 1979/003231/06)
Share codes: JSE : SOL NYSE : SSL
ISIN codes: ZAE000006896 US8038663006
("Sasol" or "the Company")
SASOL POLYMERS` SETTLEMENT OF SECTION 4 COMPLAINT
As previously disclosed by Sasol as part of its ongoing disclosures, the South
African Competition Commission has been investigating the South African polymers
industry. Sasol Polymers, a division of Sasol Chemical Industries Limited
("Sasol Polymers"), has now concluded a settlement agreement with the
Competition Commission ("the Commission") in relation to its existing propylene
supply agreement ("the Supply Agreement") with Safripol (Proprietary) Limited
("Safripol"). The Commission concluded that the pricing provisions of the
Supply Agreement gave rise to indirect price fixing between Sasol Polymers and
Safripol.
The Supply Agreement was concluded pursuant to concerns raised by Safripol in
relation to the proposed merger in 1993 of Sasol and AECI Limited`s monomer,
polymer and certain other chemical operations. To address these concerns, the
then Competition Board required a supply agreement, which would ensure
Safripol`s ongoing access to propylene according to a pricing formula, which
would result in market-related prices. At the time, neither party understood
this pricing formula to give rise to competition law concerns. However, the
Commission, in terms of the current Competition Act, found that the pricing
formula, which required the exchange of pricing information amounts to indirect
price fixing. This contravention is technical in nature and was not as a
result of an intentional agreement to fix prices. The terms of the Supply
Agreement, including the pricing formula, were prompted by the Competition
Board`s requirements.
Given the uncertainty surrounding the legal position in relation to the pricing
formula and the technicality of the matter, it was considered prudent to settle
the matter. Sasol Polymers has therefore agreed to pay a penalty of R 111 690
000, which represents 3% of Sasol Polymers` turnover derived from its sale of
polypropylene products for its financial year ending 2009. The settlement
agreement is in full and final settlement of the Commission`s allegations that
the pricing formula gave rise to indirect price fixing.
The settlement agreement is subject to confirmation by the Tribunal.
Norbert Behrens, general manager group strategy and planning at Sasol said, "As
previously indicated Sasol completed an extensive competition law compliance
review in 2009. This is one of the matters outstanding and is now being brought
to finality, in line with our approach to be fully compliant and resolve any
competition law issues including technical ones."
As part of its investigation into the polymer industry, the Commission has also
contended that the prices at which Sasol Polymers supplies propylene and
polypropylene are excessive. Sasol Polymers does not agree with the
Commission`s position in this regard and is contesting the Commission`s
allegations. Consequently, the Commission`s allegations in respect of excessive
pricing do not form any part of the settlement agreement concluded between the
parties.
14 December 2010
Johannesburg
Sponsor
Deutsche Securities (SA) (Proprietary) Limited
Date: 14/12/2010 16:40:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS. |
|
