Guinness Peat waits for verdict on fine

Business Editor·NZ Herald·

27 Jun, 2012 05:30 PM2 mins to read

John Hawkins, chairman of the Shareholders Association. Photo / Dean Purcell

Guinness Peat Group shareholders will find out today if the company has to cough up the full amount for a €110.3 million ($174.6 million) price-fixing fine linked to its thread-making Coats business.

The European General Court in Luxembourg was expected to deliver a decision last night New Zealand time on an appeal made by Coats.

The company was fined in September 2007 after a European Commission investigation into European fasteners.

Since then it has accrued €24.7 million in additional interest costs.

The commission alleged Coats was part of a market-sharing agreement in the haberdashery industry.

GPG and its subsidiary Coats reject the allegations and made written pleadings as well as an oral submission on July 7 last year.

In its 2011 annual report, GPG said it was adequately provisioned for the fine but it declined to say what those provisions were.

"The directors believe that disclosure of additional information regarding these provisions could be expected to prejudice seriously the group's position," the report stated.

John Hawkins, chairman of the Shareholders Association, said it seemed unlikely the decision would be overturned.

"I'm not holding my breath over the result," Hawkins said. "The best they can hope for is a reduction."

Hawkins said that if the fine was not reduced it would not have a big impact on the company's balance sheet as it was provided for.

"But if it was to be overturned there could be significant extra money available for shareholders.