One of Norway’s biggest shipping companies, Wilh Wilhelmsen, is caught up in a price-fixing case involving two of its partly owned car carrier operations. The company has set aside more than USD 200 million (NOK 1.7 billion) to cover the cost of possibly heavy fines.
“We feel this is an attack on our integrity,” Thomas Wilhelmsen, chief executive and the latest generation of the family to run the international shipping operation, told newspaper Dagens Næringsliv (DN) when the company revealed the provision for fines in its third-quarter earnings report. Wilhelmsen called the case “incredibly unfortunate,” but stressed that the entire industry was under investigation, not just Wilhelmsen.
The case stems from raids on shipping companies in Japan in 2012. Japanese competition authorities suspected illegal price cooperation regarding the transport of new cars from their factories to Europe, South Africa and North America. The firms targeted are Wallenius Wilhelmsen Logistics (WWL), in which Wilh Wilhelmsen owns 50 percent, and Eukor Car Carriers, in which Wilhelmsen has a 40 percent stake.
Thomas Wilhelmsen claimed the company had stressed “corporate governance” for years, “to ensure that we operated in accordance with the laws of all countries where we’re represented.” Nils P Dyvik, who led WWL during the years when the alleged price-fixing took place and is now Wilhelmsen Holdings’ finance director, told DN he “knew nothing about” the alleged price-fixing and still doesn’t today. The company has been fined USD 34 million in Japan and USD 7.7 million in South Africa for allegedly having been part of an agreement that hindered competition in the car carrier trade. Investigations by the EU, US and Canada have yet to be concluded.
DN reported that that the costs of fines and lawsuits over the alleged price fixing can reach NOK 4 billion, which can exert “considerably negative” pressure on Wilhelmsen’s shares, according to an analyst at Clarksons Platou.