Rolls of steel

ArcelorMittal may receive higher fine second time around - Jean Meijer, Bowman Gilfillan

| Mon, 01 Jun 2009 18:42 In an interview on SAfm @ 18.25 on 29 May 2009 [miningmx.com] -- The Competition Appeal Court decision to uphold steel giant ArcelorMittal SA's appeal against a record R691.8m fine caused its share price to jump 4% on Friday, but it may be facing a higher fine the second time the tribunal judges it.

"The decision is very interesting in that although the Tribunal has set aside both the findings that Mittal engaged in excessive pricing and the fine, it's done it on the basis that the competition tribunal applied the wrong test in finding that Mittal was charging an excessive price," partner at Bowman Gilfillan Jean Meijer said on SAfm Market Update.

Meijer said the onus now shifts onto Mittal to justify or to rebut the presumption that it applied excessive pricing to its products.

"That will not happen by way of the leading of new evidence, but rather the tribunal is going to have to go back and look at the evidence that was initially led, and see if the justification that Mittal gave for its pricing rebuts the presumption that in fact it has been engaging in excessive pricing," he said.

Meijer said the competition authorities have become increasingly aggressive in relation to their fining for competition contraventions. "So theoretically I guess that there could be a higher fine [the second time around] because that fining decision has been set aside. And once the tribunal makes its new finding on the basis of the evidence, I think that there could be a higher fine and different remedies imposed," he said.

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