The BlueScope Steel Limited (ASX: BSL) share price is trading flat on Friday despite the ACCC instituting civil proceedings in the Federal Court against the steel producer and its former general manager of sales and marketing, Jason Ellis.
Why is the ACCC taking action?
The competition watchdog is taking action due to alleged cartel conduct in relation to the supply of flat steel products.
According to the ACCC media release, the regulator alleges that between September 2013 and June 2014, BlueScope and Mr Ellis attempted to induce various steel distributors in Australia and overseas manufacturers to enter agreements containing a price fixing provision.
ACCC Chair, Rod Sims, explained: "BlueScope is the major manufacturer of flat steel products in Australia. Flat steel products are an essential material in a number of important sectors of the Australian economy, including the construction, building, manufacturing, automotive and transport industries."
"This matter involves allegations of serious cartel conduct. Given the six year limitation period for taking civil proceedings for certain of the alleged conduct was about to expire, the ACCC has determined it is appropriate to commence such proceedings against BlueScope and Mr Ellis," Mr Sims said.
The ACCC advised that it is seeking declarations, pecuniary penalties, and costs against BlueScope and Mr Ellis, as well as an order to disqualify its former employee from managing corporations.
BlueScope response.
BlueScope was quick to respond to the allegations.
Its chairman John Bevan said: "These are serious allegations and the Board is treating them very seriously. Since becoming aware of the ACCC's investigation, we have constructively engaged with the ACCC and conducted our own internal investigation. While we have not seen all of the evidence that has been relied on by the ACCC, based on what we know today, we do not believe that BlueScope, or any current or former employees, have engaged in cartel conduct."
This was echoed by the company's CEO, Mark Vassella, who said: "The alleged conduct does not represent the BlueScope way, or the values that we work hard to instil in our team. We take matters of competition law compliance and corporate governance extremely seriously."
The company advised that it will now review the allegations and evidence and continue to engage constructively with the ACCC.
BlueScope isn't the only company being targeted by the ACCC. Both Kogan.com Ltd (ASX: KGN) and Woolworths Group Ltd (ASX: WOW) have been hit with proceedings for alleged false or misleading representations. You can read more about those here and here.
