Trelleborg agrees to plead guilty in marine fender case

ERJ staff report (DS)

Tampa, Florida -- Trelleborg AB has agreed with the US Department of Justice that two Trelleborg Group subsidiaries shall pay a combined fine of USD 11 million (euro 8.6 million) to the US authorities as fines for their involvement in a cartel for foam-filled marine fenders and buoys. The case is related to the on-going Marine Hose investigation, but separate from it.

A two-count felony charge was filed in US District Court in Norfolk, Virginia, against Virginia Harbor Services Inc., formerly known as Trelleborg Engineered Products Inc. (VHS/TEPI), a manufacturer of foam-filled marine fenders, buoys and plastic marine pilings headquartered in Clearbrook, Virginia.

According to the charges, VHS/TEPI participated in a conspiracy between December 2002 and August 2005 to allocate customers and rig bids for contracts to sell foam-filled marine fenders and buoys, and also participated in a separate conspiracy between December 2002 and May 2003 to allocate customers and rig bids for contracts to sell plastic marine pilings. Under the terms of the plea agreement, which is subject to court approval, VHS/TEPI has agreed to pay a $7.5 million criminal fine and to cooperate fully in the Department's ongoing antitrust investigation.

In addition, a one-count felony charge was filed in U.S. District Court in Fort Lauderdale, Florida, against Trelleborg Industrie S.A.S. (TISAS), a manufacturer of marine hose headquartered in Clermont-Ferrand, France. TISAS is charged with participating in a conspiracy from at least as early as 1999 and continuing until as late as May 2, 2007, to allocate market shares, fix prices and rig bids for contracts to sell marine hose to purchasers in the United States and elsewhere. Marine hose is a flexible rubber hose used to transfer oil between tankers and storage facilities.

TISAS has agreed to pay a $3.5 million criminal fine and to cooperate fully in the Department's ongoing antitrust investigation.

The size of the US fine is in line with the overall expectations Trelleborg communicated in connection with the European Commission's decision in January 2009. The agreements are to be approved in court. The Group's French subsidiary concerned has previously paid close to USD 2 M in damages to aggrieved customers as settlement of a class action, which concerned Trelleborg and other companies, for alleged illegal price fixing concerning marine oil hoses. These fines and expenses were accounted for in the SEK 416 M provision charged to the fourth quarter of 2008.

The competition situation regarding certain types of marine oil hoses was also investigated by the European Commission, which announced a decision in the matter on January 28, 2009 and established the amount of the fine at EUR 24.5 M for the subsidiary concerned. Trelleborg has appealed this decision to the First Instance of the European Court of Justice. It is not currently possible to estimate when the court could make a decision on the appeal.

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Press release from Trelleborg

Press release from US Department of Justice