Brazil charges executives with price fixing scheme

|
News,Business

SAO PAULO (AP) — Brazilian prosecutors have charged 30 executives from a dozen international companies with forming a cartel to raise prices for the construction and upkeep of subway and train systems in Sao Paulo.

The press office of the Sao Paulo State Prosecutor's Office said Tuesday that the companies involved include Siemens of Germany, CAF of Spain, Mitsui of Japan, Bombardier of Canada, Alstom of France and Hyundai Rotem of South Korea.

The prosecutor's office charged in a statement that the companies engaged in price fixing and said those that won bids then contracted the losing companies to provide services. Five contacts signed between 1998 and 2008 are being investigated.

Judges must decide if they will accept the charges and try the executives, who included both Brazilians and foreigners.

Alstom said In a statement it had no comment because it had not seen the charges.

Bombardier said only that it was cooperating with the investigation.

Siemens said it has a "zero tolerance posture against any kind of illicit conduct" and was cooperating with the investigations.

CAF, Mitsui and Hyundai Rotem had no immediate comment.

Last week, Brazil's antitrust agency began legal proceedings against these and other major international companies for allegedly forming cartels for the construction and maintenance of public transportation systems in Sao Paulo, Brasilia, Belo Horizonte, Porto Alegre and Rio de Janeiro.

The Administrative Council for Economic Defense, known as CADE, said 18 companies were part of a cartel involved in 15 projects valued at $4 billion.

CADE said the companies used several anticompetitive strategies such as the prearrangement of offers tendered in bidding processes. At times, it said, the cartel would also determine which company would win a bid by allowing only one to tender an offer.

In 2013, Siemens struck a plea agreement with authorities and denounced the existence of the price-fixing scheme, CADE's statement said.

The companies that allegedly formed part of the cartel will be summoned to present their defense, CADE said. It was unclear when they will be summoned.

View article comments Leave a comment