Conviction For Price Fixing
In December 2005 the ACCC commenced a civil penalty proceeding against Visy companies, Pratt, and others, for alleged involvement in a cartel in the packaging industry.
On 10 October 2007, Richard Pratt was formally accused of price fixing, cheating customers and companies out of approximately A$700 million in the nation's biggest-ever cartel case. The ACCC alleged "very serious contraventions" of the law and that these had been "carefully and deliberately concealed" by Visy senior executives. The ACCC counsel further stated:
"There can be no suggestion that Visy acted in ignorance of its obligations under the act,"
and further added that the deliberate use of pre-paid mobile phones that could not be traced and the holding of meetings in private homes, motel rooms and suburban parks
"...provides a strong indication that Visy was fully aware that the conduct was illegal".
After more than a year of denials Pratt subsequently admitted his guilt, acknowledging he and his company, and "rival" company Amcor deliberately broke the law. Pratt was aggrieved by the criminal prosecution and its effect on his reputation, stating:
"I feel very angry—Visy is seen as Richard Pratt's company—there is a certain amount of character assassination for me personally because I am a tall poppy in the community; it's a big scalp (for the ACCC). My reputation is something I have been building for 50 years and so I am worried that the general public will now see me as a rich person who has made his money doing something that is wrong in the eyes of the law."
On 2 November 2007, Pratt and the Visy group received an A$36 million fine, representing both the largest fine in Australian history and an estimated 0.75% of the Pratt fortune. Federal Court judge Justice Heerey said Mr Pratt and his senior executives were knowingly concerned in the cartel, which involved price fixing and market sharing. "This is the worst cartel to come before the courts in 30-plus years," Justice Heerey said.
Additionally, customers of Visy have initiated claims against Visy and Amcor, including a $120 million suit by Cadbury Schweppes against Amcor.
Read more about this topic: Richard Pratt (Australian Businessman)
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