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IMI fined £30.5m over price-rigging

Engineering firm pays penalty for running 12-year long cartel

ENGINEERING giant IMI could have nearly half of its interim pre-tax profits wiped out by a £30.5 million fine imposed on the firm by European Commission cartel-busters last week.

The commission fined IMI and seven other European companies a total of £151 million for operating a 12-year long cartel in copper tubes.

IMI released its interim results for the six months to June on Monday.These showed pre-tax profits up 13.7 per cent to £64.1 million on turnover up from £780 million to £801 million.

A company spokesman said: 'The European Commission has announced the imposition of a fine of £30.5 million on IMI in relation to its former copper tube business, which was sold in 2002.

'We await the details of the decision, following which we will be in a position to make an assessment on a possible appeal.

'Pending receipt of this information the board considers it inappropriate to make a provision in the interim results.'

Cartel-busters at the commission were tipped off about a price-rigging deal in 2001 when US-based Mueller Industries approached investigators.

Mueller was part of the cartel but escaped any fine by blowing the whistle on the scam.

The subsequent probe revealed that cartel members fixed prices during a series of clandestine meetings in airport lounges.

The ring operated under a number of codenames and the companies allocated production volumes and market shares, as they set price targets for copper plumbing tubes.

Notes taken from the first meeting at Zurich airport said: 'The objective is to keep the prices in the high-price-level countries high - if possible to increase them even more.'

The fines bring the total of price-rigging penalties imposed by the commission to more than £3 billion.

Competition commissioner Mario Monti said: 'Because of the companies' illegal behaviour, European consumers paid more for plumbing replacement work than if the healthy forces of competition had been at play.'