German Federal Court confirms HeidelbergCement’s cartel fine

Germany’s Federal Court has confirmed the 2009 fine imposed on HeidelbergCement by the Higher Court of Düsseldorf at a reduced level of EUR161.4m, the German cement major said in a statement on Tuesday.

“We have to accept the verdict of the Federal Court of Justice, and we state that the law suit has now been concluded after a long period of time,” says Dr Bernd Scheifele, Chairman of the Managing Board of HeidelbergCement.

HeidelbergCement  and other cement producers were initially fined in 2003 by the German competition authority for violations of cartel laws between 1990 and 2002. After an appeal against the fine to the Higher Court of Düsseldorf, the case was reevaluated in 2009, and the fine reduced from around EUR250m to around EUR170m.  An appeal by HeidelbergCement against this verdict was lodged with the Federal Court of Justice in connection with the breach of procedural and material regulations. This led to the Federal Court finally reducing HeidelbergCement’s fine by an additional EUR8.5m (or five per cent) to EUR161.4m due to the excessive length of the proceedings. The proceedings reduced the fine by more than EUR88.5m against the fine originally imposed.

HeidelbergCement said that following the respective provision, a P&L effective charge of EUR30m remains in 2Q13. The cash outflow of EUR161.4m will probably occur within the next 12-18 months. Its result outlook and financial planning remain unchanged.

Dr Scheifele further added: “No current member of the Managing Board of HeidelbergCement was involved in the incidents which date back more than 10 years. Since then, HeidelbergCement has set up a consistent compliance programme which was certified by a renowned law firm in 2010.” Measures include includes a clear company guideline and comprehensive training measures for Managing Board members and employees, supported by modern communication tools, as well as a 24/7 compliance hotline. Dr Scheifele stated that the Managing Board communicates regularly to all managers and employees that cartel law violations are not tolerated at HeidelbergCement. "With all these measures in place, we believe to be well prepared to avoid such violations in the future," he noted.