25 April 2014
Lafarge faces price-fixing penalties 25 April 2014
Kenya: Lafarge could face penalties by the Competition Authority of Kenya (CAK) for suspected price-fixing. CAK has accused Lafarge of possible price-fixing owing to its cross-directorship in East African Portland Cement Company (EAPCC) and Bamburi Cement. Lafarge has a 41.7% stake in EAPCC and a 58.9% stake in Bamburi.
"Cross-shareholdings such as these are widely recognised to dampen competition," said CAK. "Even passive shareholdings change the incentives to set prices, as some of the earnings from sales diverted to a rival are now internalised."
CAK is expected to rule in June 2014 as to whether or not Lafarge is culpable of having 'Unwarranted concentration of economic power.' If found guilty, CAK could force Lafarge to sell off its stake in one of the businesses. The Competition Act (No 12 of 2010) also stipulates that Lafarge directors, if found guilty of price fixing, could be forced to pay up to US$115,000 in fines or serve five-year jail terms.
The report comes four months after the Kenyan government, which together with the National Social Security Fund (NSSF) has a controlling stake of 52.3% in EAPCC, accused Lafarge of attempting to destabilise the cement maker to protect its interests in Bamburi. Lafarge countered that its minority stake in EAPCC is insufficient to exert control over the firm. They added that EAPCC is a genuine competitor of Bamburi Cement and that Lafarge stands to lose if it were to destabilise EAPCC.
The director-general of CAK, Kariuki Wang'ombe, stated that the current shareholding structure is not good for fair business. "Cross-directorship could lead to price-fixing since this creates a position where a competitor is privy to the strategic decisions of another competitor. However, it is not conclusive that there is price-fixing going on," said Wang'ombe.
Two executives at China Resources detained 25 April 2014
China: According to local media, Chinese authorities have detained two senior executives at units of China Resources Holding as the chairman of the state-run conglomerate, Song Lin, is being investigated for corruption.
Wang Hongkun, an executive director of China Resources Land and Wu Ding, chief executive of China Resources Capital Holdings, were detained. China Resources Land said that Hongkun had resigned due to personal health reasons.
China's top anti-corruption body said it was investigating Lin for a 'Serious violation of discipline.' Song has denied the allegations.
China Resources Holdings said that it had appointed Fu Yuning, a former chairman of China Merchants Group, as its new chairman.
Ukraine: HeidelbergCement Ukraine has appointed Wolfram Gaertner and Robert Breyer as supervisory board members for three years. In addition, Andrzej Balcerek, Klaus Schwind and Andreas Kern were re-elected as supervisory board members. At the same time, Ernest Jelito was removed from the supervisory board.