Australia's third-richest man, cardboard box billionaire Richard Pratt, apologized yesterday for his part in a price-fixing cartel that is likely to result in the country's largest ever anti-trust fine.
Pratt sent the apology to customers of his company Visy on Monday and publicly released it yesterday as part of a settlement with the Australian Competition and Consumer Commission (ACCC), the consumer watchdog.
Pratt, whose personal wealth was estimated at US$5.4 billion in this year's Business Review Weekly rich list, said Visy's deal with rival Amcor had breached Australian anti-trust laws.
Pratt argued Visy -- which describes itself as the world's largest privately-owned packaging and recycling company -- had been trying to take advantage of Amcor, Visy's only major Australian competitor.
"It is now apparent to us that Visy executives erred when they had discussions with Amcor and sought to out-maneuver them as part of Visy's pursuit of market share gains," he said.
Details of the settlement with the ACCC have not been made public but the Australian Financial Review said Visy would be fined up to US$40 million, an Australian record in an anti-trust case.
Amcor executives received immunity from prosecution after they initially approached the ACCC about the cartel and agreed to fully cooperate with the regulator's action, which was launched in 2005.
Pratt said in an interview with the Weekend Australian that he was making the admission to avoid a protracted court case.
"I've had to wrestle with the choice of going to court to explain myself and try to clear my name or seeking a negotiated settlement, which will necessarily involve admissions of breaking the law," Pratt told the paper.
"On balance, the appropriate and pragmatic thing to do is settle," he said.
The ACCC alleged Pratt and Amcor's then chief executive Russell Jones thrashed out details of the cartel at a secret meeting in a Melbourne hotel in 2001.
Under the terms of the deal, Visy and Amcor agreed not to try to poach each others customers in order to maintain their duopoly and discourage other rivals from gaining a foothold in the Australian market.
Pratt's statement to customers said: "Visy's actions were motivated by a desire to take advantage of our competitor."
"We believe that actual market outcomes demonstrate that our behavior did not disadvantage our customers," he said.
The Australian Financial Review reported yesterday that lawyers were preparing a class action on behalf of Amcor and Visy customers that could seek up to US$300 million in damages.
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