Prysmian Loses Bid to Halt Australian Antitrust Suit

Prysmian SpA, (PRY) Nexans SA (NEX) and Japanese cable suppliers lost a bid in Australia to stop a regulator lawsuit claiming they conspired to fix prices.

Prysmian, Nexans, Viscas Corp., Exsym Corp. and J-Power Systems Corp. formed a cartel and agreed not to compete against each other on price in bids for projects for the supply of land and submarine-based cables, the Australian Competition and Consumer Commission said in a 2009 lawsuit.

Australia Federal Court Justice Bruce Lander yesterday dismissed Nexans’ claim that it didn’t operate in the country and Prysmian’s objection that the ACCC’s lawsuit relies on inadmissible hearsay evidence. Lander also allowed the ACCC to file additional evidence, in his judgment released in Adelaide.

Prysmian has also been named in a similar case before the European Commission. Goldman Sachs Group Inc., (GS) which formerly owned the cable systems company through its private equity units, said the European Commission told the firm it may have to pay fines related to the case.

Goldman’s private-equity funds bought the power-cable unit and telecommunications cable business from Milan-based Pirelli & C. SpA in 2005 and renamed it Prysmian Cables & Systems, which became Prysmian SpA in 2007. The Goldman funds sold the Prysmian shares in 2009.

The European Commission sent complaints to 12 companies “that may have colluded to allocate markets and customers for underground and submarine power cable projects and fix prices,” according to a July 6 statement from the commission. Prysmian said on July 5 that it had received an antitrust complaint and that it would defend itself.

Snowy Hydro

In Australia the ACCC persuaded the judge that evidence presented is sufficient to warrant a trial on the charges, citing a tender issued by Snowy Hydro Ltd. in 2003 as an example, for which the cartel agreed Prysmian would bid, according to Lander’s judgment. Prysmian didn’t win the tender.

“Although neither Prysmian nor Nexans were ultimately successful in winning the tender, that is not to the point if they were engaged in cartel conduct,” Lander wrote.

The case is Australian Competition and Consumer Commission v. Prysmian Cavi E Systemi Energia SRI (Formerly Pirelli Cavi E Systemi Energia Spa. File No. SAD145/2009. Federal Court of Australia (Adelaide).

To contact the reporter on this story: Joe Schneider in Sydney at jschneider5@bloomberg.net

To contact the editor responsible for this story: Douglas Wong at dwong19@bloomberg.net

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