Private equity firms CVC Capital Partners and Bencis Capital Partners are facing hefty fines from Dutch competition authorities after charging a former portfolio company with price fixing.
The Autoriteit Consument & Markt (ACM) ruled that the two firms must pay between €450,000 and €1.5 million after Meneba Beheer, a Dutch flour business, was involved in a collective agreement with competitors to keep prices stable between 2001 and 2007, the Dutch regulator said.
ACM said the investment firms could be held liable for the actions of the portfolio company because they held a controlling stake. The fine represents the first time ACM has made this type of liability connection.
“ACM is of the opinion that investment firms, too, can be held responsible for the behavior of the firms they own (through those funds), particularly if the investment firm in question has decisive influence,” a statement from the regulator said. “ACM has concluded that this was the case with the investment firms which have now been fined.”
The Dutch regulator’s case began in 2012 when it fined 14 businesses in Holland, Germany and Belgium that were involved in a so-called “wheat cartel”. At the time, 11 producers appealed the decision. In August 2014, a court in Rotterdam ruled that seven of these producers – including Meneba Beheer – were indeed involved in price fixing activities.
CVC and Bencis will be able to appeal the decision, although an exact time frame for this is unclear. A spokesperson for ACM was not immediately available for comment. Bencis and CVC declined to comment.
The case follows an April European Commission ruling which saw Goldman Sachs fined €37.3 million for participation by Prysmian, a Goldman Sachs Capital Partners (GSCP) portfolio company, in a global cartel. Goldman lodged an appeal of the Commission's decision with the EU’s General Court in Luxembourg where it will look to argue that it was merely a financial investor and should not be treated as a parent company to Prysmian for the period of its ownership.