SOL - Sasol Nitro settlement and Sasol competition law compliance review Release Date: 06/05/2009 09:01:23 Code(s): SOL
SOL - Sasol Nitro settlement and Sasol competition law compliance review
(Incorporated in South Africa)
(Registration number: 1979/003231/06)
ISIN Code: ZAE000006896
Share Code: SOL
NYSE Code: SSL
Sasol Nitro settlement and Sasol competition law compliance review
Sasol announced in January 2009 that as part of the Group`s ongoing legal
compliance programme Sasol Limited had initiated a comprehensive competition
law compliance review of all Sasol businesses in July 2008.
As previously announced Sasol will, in the course of conducting the
competition law compliance review, adopt appropriate remedial steps and make
disclosures on material findings and developments as and when appropriate.
These activities are still in progress across all of Sasol`s businesses.
Although it was envisaged in January 2009 that the review process would be
completed during the first half of 2009 current progress indicates that the
review should be completed in the second half of 2009.
Although the competition law compliance review of Sasol Nitro has not been
completed in all respects, Sasol is now in a position to disclose the
following material developments in respect of the phosphoric acid and
fertiliser businesses of Sasol Nitro.
As indicated in our announcement made in January 2009, additional information
has been revealed by the competition law compliance review process relevant to
previously disclosed competition law legal proceedings in respect of the Nutri-
Flo matter and the phosphoric acid investigation (see pages 179 - 181 of the
2008 Annual Financial Statements and pages 75 - 77 of the 2008 Annual Report
submitted on Form 20-F to the United States Securities and Exchange Commission
for the previous public disclosures in these matters) and that settlement
discussions had commenced with the South African Competition Commission.
These discussions with the Competition Commission have progressed to the
extent that a settlement agreement has been concluded with the Competition
Commission. Subject to confirmation by the Competition Tribunal, the agreement
will have the effect of a full and final settlement and conclusion of all
proceedings between the Commission and Sasol Chemical Industries Limited
relating to any alleged contraventions by Sasol Chemical Industries Limited
(Sasol Nitro division) of section 4(1)(b) (prohibiting collusive conduct) of
the South African Competition Act that were the subject of the Commission`s
investigations in respect of the Nutri-Flo matter (under case numbers
31/CR/May05) and the phosphoric acid investigation (under 2007Aug3147 and
2007Dec3382). In terms of the agreement Sasol Chemical Industries Limited will
pay an administrative penalty of R188, 01 million. Provisions raised this
financial year are sufficient to cover this administrative penalty.
Steps have been taken by Sasol Nitro to address these areas of non-compliance.
The allegations by the Competition Commission relating to excessive pricing
and exclusionary conduct flowing from the Nutri-Flo and Profert complaints are
not, however, part of the settlement agreement. Sasol has been in discussions
with the Commission about these matters and hope to resume discussions at an
opportune time. These matters have not proceeded sufficiently to assess any
potential adverse financial impact with reasonable accuracy.
Shareholders` attention is drawn to the media release attached to this
announcement regarding the above settlement agreement.
6 May 2009
Issued by sponsor: Deutsche Securities (SA) (Proprietary) Limited
Forward-looking statements: In this document we make certain statements that
are not historical facts and relate to analyses and other information based on
forecasts of future results not yet determinable, relating, amongst other
things, to exchange rate fluctuations, volume growth, increases in market
share, total shareholder return and cost reductions. These are forward-looking
statements as defined in the United States Private Securities Litigation
Reform Act of 1995. Words such as "believe", "anticipate", "intend", "seek",
"will", "plan", "could", "may", "endeavour" and "project" and similar
expressions are intended to identify such forward-looking statements, but are
not the exclusive means of identifying such statements. Forward-looking
statements involve inherent risks and uncertainties and, if one or more of
these risks materialise, or should underlying assumptions prove incorrect,
actual results may be very different from those anticipated. The factors that
could cause our actual results to differ materially from such forward-looking
statements are discussed more fully in our annual reports under the Securities
Exchange Act of 1934 on Form 20-F filed on 21 November 2007 and 08 October
2008 in other filings with the United States Securities and Exchange
Commission. Forward-looking statements apply only as of the date on which they
are made, and Sasol does not undertake any obligation to update or revise any
of them, whether as a result of new information, future events or otherwise.
SASOL MEDIA RELEASE
Sasol settles with Competition Commission regarding allegations of collusion
in its fertiliser and phosphoric acid businesses
Sasol Nitro, a division of Sasol Chemical Industries Limited, has reached a
settlement agreement with the Competition Commission of South Africa, relating
to its fertiliser and phosphoric acid businesses. The agreement is subject to
confirmation by the Competition Tribunal.
In January this year, Sasol announced that as part of its ongoing legal
compliance programme, Sasol Limited initiated a competition law compliance
review in July 2008 of all Sasol businesses. The competition law compliance
review proactively analyses business activities across Sasol Limited and its
subsidiaries to ensure that such activities are compliant. Although it was
envisaged in January 2009 that the review process would be completed during
the first half of 2009 current progress indicates that the review should be
completed in the second half of 2009.
"We announced at the start of this year that the compliance review is
rigorously scrutinising all our businesses and that in some areas problems of
potential non-compliance had been identified. We have worked closely with the
Competition Commission in seeking resolution to these matters and while this
settlement agreement is an important step, there is much work ahead and we
remain committed to following through on each matter in order to achieve full
compliance," Sasol chief executive Pat Davies said.
As a result of findings by the internal competition law compliance review,
Sasol engaged with the Competition Commission in December 2008, with the
intent to settle the Sasol Nitro matters including alleged collusive conduct
in the fertiliser business, issues referred to the Competition Tribunal by
Nutri-Flo and Profert as well as issues related to phosphoric acid.
The settlement agreement relates to matters of alleged collusion. Sasol and
the Commission remain in discussion regarding outstanding allegations of abuse
During December 2008, Sasol`s internal competition law compliance review
revealed evidence of potentially collusive conduct in the fertiliser business
of Sasol Nitro. The matter was reported to the Competition Commission by Sasol
management when they became aware of the conduct.
The review indicated that the conduct in respect of fertilisers ceased in 2004
and although these activities are not identical to those referred to in the
Nutri-Flo matter a further review concluded that committees were set up to
coordinate business practices, derive forecasted market shares and ensure
balance of supply and demand. Accordingly, Sasol entered into settlement
discussions with the Commission in respect of the Nutri-Flo matter.
The remainder of the Nutri-Flo matter and the Profert matter, which deal with
allegations of abuse of dominance in the market place, form the subject-matter
of continuing engagement between Sasol and the Competition Commission.
Phosphoric acid business
In August of 2007, the Competition Commission initiated a complaint against
Foskor and Sasol relating to possible contraventions of the Competition Act in
respect of phosphoric acid. The complaint against Sasol related to its
agreement with Foskor which was concluded to ensure the continued viability
of Sasol`s Phalaborwa phosphoric acid operations and was not intended to
breach any competition laws. Upon receiving external legal advice, Sasol
concluded that certain provisions of these agreements may be a contravention
of the Competition Act. The restrictive clause within the agreement was
terminated in 2007.
An administrative penalty of the amount of R188,01 million has been agreed by
Sasol and the Competition Commission.
While many of these activities took place and then ceased some years ago,
Sasol deeply regrets that these activities occurred. Sasol remains committed
to rooting out any non-compliance within its businesses and to achieving full
compliance with all legislation.
"The conduct, identified in these investigations of the Sasol Nitro business,
is unacceptable and runs counter to our Sasol values," said Sasol Nitro MD,
"This settlement agreement is an important step and we are looking forward to
concluding outstanding matters," Brand said.
Sasol: group communication manager
Tel: +27 11 441 3252
Fax: +27 11 522 9994
Mobile: +27 82 883 9697
Date: 06/05/2009 09:01:23 Supplied by www.sharenet.co.za
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