The European Court of Justice has today ruled on the case concerning Aalborg Portland's alleged participation in a European market-sharing agreement from 1984 to 1988. In November 1994 the European Commission imposed an administrative penalty on Aalborg Portland amounting to approximately DKK 30m (including accumulated interest until today DKK 42m) for its alleged participation in a cartel among European cement producers. However, since Aalborg Portland has consistently rejected the Commission's charges as unfounded, because the company has not participated in nor had any knowledge of a market-sharing agreement, it decided in February 1995, like the other European cement producers charged, to appeal the Commission's decision to the European Court of Justice. The Court has now heard and passed judgment on this appeal.
The judgment of the European Court of Justice partly acknowledges several of Aalborg Portland's objections against the Commission's charges and the Court has therefore lowered the penalty imposed by DKK 13m to DKK 17m (including accumulated interest from DKK 42m to approximately DKK 24m).
Commenting the judgment of the European Court of Justice, Mr Ib Christensen, Group Executive Vice President, FLS Industries, said: ''It is with mixed feelings we have heard the judgment by the European Court of Justice. We welcome the fact that the Court has accepted some of our objections and has lowered the penalty imposed. However, we had expected that all charges against us had been dismissed since it is still our opinion that they are based on the general assumption that each member of the cement producers' association, Cembureau, who attended a few meetings in 1983 and 1984 also took part in a market-sharing agreement with other members of the trade association. This is assumed despite the fact that these meetings, in Aalborg Portland's opinion, dealt with other issues and did not in any way change or influence Aalborg Portland's market behaviour.
However, we s
hall have to study the judgment more carefully to decide whether there are grounds for an appeal of the Court's decision. I must admit though that I would like to close this time-consuming and demanding case so that we might concentrate on the future rather than spend more effort and resources on events that relate to the mid eighties.
As mentioned in their Annual Reports since the European Commission administratively imposed the penalty in 1994, Aalborg Portland Holding and FLS Industries have made no balance sheet provisions for the penalty because the legal opinion so far has been that the final settlement of the case would not result in any sanctions being imposed on Aalborg Portland.
If Aalborg Portland decides not to appeal the judgment (last date of appeal two months from today), the penalty including interest until 1 February 2000, amounting to DKK 24m, will be paid and charged to the profit and loss account in this financial year.
FLS Industries A/S
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