Sasol denies breaking any competition laws

Published Aug 12, 2010

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Sasol Chemical Industries did not believe it had breached any competition laws, the company said yesterday.

Earlier yesterday, the Competition Commission stated it had referred complaints of collusion and excessive pricing in the polymers market against Sasol Chemical Industries and Safripol to the Competition Tribunal for adjudication.

The commission also announced it had simultaneously reached a settlement with Safripol in which Safripol admitted that there was a supply agreement between Sasol Chemical Industries and Safripol and its implementation amounted to price fixing in contravention of the Competition Act.

The Sasol Group said in a statement: "Sasol Chemical Industries intends defending the matter before the Competition Tribunal should an amicable resolution of the matter not be achieved.

"Accordingly, at this time, there is no reasonable certainty as to whether or not Sasol Chemical Industries will be found to have contravened competition laws as alleged, whether a penalty will be imposed and the quantum thereof.

The Competition Commission indicated that it was seeking an administrative penalty of 10 percent of Sasol Chemical Industries' annual turnover for each of these alleged contraventions.

Sasol stated: "The Competition Commission's allegation of collusion relates to an agreement of the Sasol Polymers division of Sasol Chemical Industries with Safripol, which was structured at the behest of the former Competition Board following the formation of Polifin (the Sasol/AECI joint venture) in 1994.

"The agreement was structured to ensure Safripol's ongoing access to propylene supply at a market-related price."

The group added that South African propylene and polypropylene prices were comparable to international prices and hence Sasol Chemical Industries believed there was no legitimate basis for the Competition Commission's excessive pricing allegations.

While Sasol Polymers had been liaising with the Competition Commission in its investigation, Sasol Chemical Industries had not yet received the referral mentioned in the Competition Commission's announcement.

"Given Sasol Chemical Industries' interactions with the Competition Commission and knowledge of this matter, the company does not believe that it has breached any competition laws," the company concluded.

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