A guilty Elf
19 Mar 2002
The US Department of Justice has announced that Elf Atochem, the international French-based chemical conglomerate, has agreed to plead guilty and pay fines totalling $8.5 million for participating in two international conspiracies that suppressed competition in the industrial chemical markets for monochloroacetic acid (MCAA) and organic peroxides.
Patrick Stainton, an Elf Atochem executive and a citizen and resident of France, also has agreed to plead guilty, to serve a 90-day jail sentence in the US, and to pay a $50,000 criminal fine for his role in the MCAA conspiracy.
MCAA is a reactive chemical compound used in the production of numerous commercial and consumer products, including pharmaceuticals, herbicides, and plastic additives. Annual US sales of MCAA are approximately $50 million.
Organic peroxides are used in the manufacture of polyvinyl chloride, low-density polyethylene, and most polystyrene products such as containers and packaging. Annual US sales of organic peroxides are approximately $300 million.
In a two-count felony case filed in US District Court in San Francisco, Elf Atochem was charged with one count of fixing prices and allocating market shares of MCAA sold in the US and elsewhere from 1995 until 1999, and one count of fixing the prices of certain organic peroxides sold in the US and elsewhere from 1997 until 1998.
Elf Atochem agreed to pay criminal fines totalling $8.5 million - $5 million for its role in the MCAA conspiracy and $3.5 million for its role in the organic peroxides conspiracy.
In a separate one-count felony case, also filed in US District court in San Francisco, Stainton was charged with participating in the MCAA conspiracy from 1995 to 1996.
Elf Atochem is the second company to plead guilty to participating in the international MCAA conspiracy, and it is the first to be implicated in the international conspiracy involving organic peroxides.
In June 2001, Akzo Nobel Chemicals pleaded guilty and was sentenced to pay a $12 million fine for its role in the MCAA conspiracy. In Elf Atochem's plea agreement, which must be approved by the court, the company has pledged to co-operate fully with ongoing federal investigations of anti-competitive behaviour in these product markets.
