Belgian Cartel, FIFA Investigation, Illinois: Compliance

Updated on

Carrefour SA and Delhaize Group SA are among retailers and manufacturers poised to face fines in an antitrust settlement with Belgium’s competition authority, according to three people familiar with the investigation.

The Belgian agency may announce penalties for 17 companies, including Colruyt SA, as soon as July over price-fixing of perfume, personal-care and household products, said the people, who asked not to be identified because the probe is private.

Colgate-Palmolive Co. is expected to avoid a fine for blowing the whistle on the cartel, two of the people said.

The fines would follow a combined penalty of more than $1 billion in a similar case in France in which L’Oreal SA was among companies sanctioned in December.

The Belgian announcement would conclude a probe begun with raids in 2007. The penalties may be a Belgian record, two of the people said.

Representatives of the Belgian Competition Authority, Delhaize, Colruyt, Carrefour and L’Oreal declined to comment. Colgate-Palmolive didn’t immediately respond to a call and e-mail.

For more, click here.

Compliance Action

Six Years After Shares Halted Amlak Investors Are Free to Trade

Investors will give their verdict on one of Dubai’s most intractable debt negotiations on Tuesday as Amlak Finance PJSC shares resume trading after a six-and-a-half-year suspension.

Shareholders in the Islamic mortgage provider have been unable to offload equity since November 2008, when trading was halted before the United Arab Emirates’ government intervened to rescue the company from insolvency. In that time, Dubai’s DFM General Index has doubled as Amlak cut its workforce by more than half and restructured $2.7 billion of liabilities.

Analysts say it’s impossible to predict the outlook for shares that last traded when George W. Bush was in the White House. The debt negotiations were the most protracted among a string of restructurings undertaken by Dubai companies in the aftermath of the global financial crisis.

Amlak, in which Emaar Properties PJSC holds a 45 percent stake, has reduced its exposure to proprietary real-estate assets and focused on property financing since its suspension, according to a company statement last week. Shares will open at

1.02 dirhams apiece, their last closing price, according to a spokesman for the Dubai Financial Market.

For more, click here.

FIFA Corruption Probe Data Examined by U.K. Prosecutors

The U.K’s Serious Fraud Office is examining material it gathered on allegations of corruption and bribery in international soccer.

The prosecutor, in an e-mailed statement May 29, didn’t specify what kind of evidence it had gathered or whether it will start its own investigation.

Swiss police arrested seven FIFA and regional soccer officials in Zurich on May 27 at the request of U.S. prosecutors who indicted 14 people on charges of racketeering, wire fraud and money laundering. The U.S. Justice Department indictment says money transfers were made to and from accounts and banks including Barclays Plc, HSBC Holdings Plc and Standard Chartered Plc, which are all based in London.

Standard Chartered said in a statement that it is looking into the payments.

For more, click here.

Separately, all seven FIFA officials arrested this week in a crackdown on soccer corruption are contesting their extradition to the U.S. in a process that may last months. One man who previously indicated a willingness to be handed over to U.S. authorities has joined the other six in contesting extradition.

For more, click here.

Illinois Seeks Federal Probe of Power Auction That Boosted Rates

Illinois asked the Federal Energy Regulatory Commission to investigate a power auction that is raising annual average electricity bills for 1.2 million customers by $131.

Attorney General Lisa Madigan wants FERC to determine whether Dynegy Inc., the Houston-based power producer, or other suppliers used market power to bid up prices, according to a May 28 complaint. Prices for this year’s auction, which were announced April 14, were almost 900 percent higher than the prior year, she said.

Dynegy, which owns more than half the power-generating capacity in the southern two-thirds of Illinois covered by the auction, said it complied with all rules for the sale.

Midcontinent Independent System Operator Inc., which manages the grid in Illinois and 14 other states, holds annual auctions to guarantee sufficient generating capacity at peak demand.

“Dynegy offered all of its megawatts into the MISO auction with no physical or economic withholding in accordance with MISO tariffs and as approved by the Independent Market Monitor,” spokesman Micah Hirschfield said in an e-mail.

Madigan wants FERC to suspend the rates or order refunds should it uncover wrongdoing. The new rates go into effect Monday.

For more, click here.

Interviews/Commentary

EU’s Hill Targets April for Interest-Rate Derivatives Rules

The European Union may implement clearing rules for over-the-counter interest-rate derivatives as early as April next year, said Jonathan Hill, the 28-nation bloc’s financial-services chief.

The European Commission has finished talks with the European Securities and Markets Authority and is “starting the process of getting the first clearing obligations adopted,” Hill said.

He made the remarks May 29 at a public hearing in Brussels on implementation of the European Market Infrastructure Regulation, or EMIR.

Leaders of the Group of 20 nations called for rules requiring over-the-counter derivatives to be centrally cleared in the wake of the 2008 financial crisis. The notional amount of outstanding OTC derivatives contracts stood at $630 trillion in December, according to figures from the Bank for International Settlements.

EMIR, which requires the clearing of standard derivatives contracts through central counterparties and the reporting of derivative contracts to trade repositories, was adopted in 2012, following commitments made by G-20 leaders in 2009.

While the rules may be in place for banks by April, the EU will give nonfinancial companies an additional three years to comply. “Nonfinancial firms make up a significant part of the OTC derivatives market,” Hill said, “but EMIR recognizes that this does not necessarily make them systemic.”

For more, click here.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE