ACR-News

THE president and CEO of Danfoss, Niels B Christiansen, has expressed his distress at his company's involvement in the international refrigeration compressor price-fixing cartel which led to a huge Euro90m fine from the European Commission on Wednesday.
The fine relates to its German subsidiary Danfoss Flensburg GmbH, in which employees exchanged information with competitors in an attempt to coordinate prices on certain household compressors and light commercial compressors sold in Europe. Fines were also imposed on fellow conspirators ACC, Embraco and Panasonic.

Niels B Christiansen said: 'We are distressed that this could happen in the Danfoss name. It goes against everything our company stands for, and I can add that the employees involved no longer work at Danfoss. In addition, we have taken a number of steps to further strengthen our internal control mechanisms and to alert our employees to unethical and unacceptable behavior.'

Niels B Christiansen insists that the case shows how difficult it is for companies to discover cases like these within their own walls. 'There was nothing in the profit and loss accounts of the German subsidiary that raised our suspicions. The business was performing poorly for a number of years, and the performance didn't change in the period during which we now know the violations took place,' said the Danfoss president and CEO.

In October, Danfoss entered a plea agreement with the American Justice Department for $3m. Competition authorities in New Zealand and Canada decided to end their investigations as far as Danfoss were concerned. Investigations are continuing in Brazil, Mexico and South Africa, and there are pending civil lawsuits in the USA and Canada.

As a consequence of the case, Danfoss has established a new, independent internal audit department that can make unannounced visits to the Group's companies. Danfoss has also strengthened its compliance function and impressed the Danfoss ethical guidelines upon the employees.

In Japan, Panasonic Corporation said it was carefully assessing the Commission's decision. Maintaining that it was the company's policy to comply with all applicable laws and regulations, including antitrust regulations, a statement said 'The Company takes this matter seriously and will make every effort to maintain the public's confidence.'