Goldman Sachs is considering an option to appeal a €37 million fine announced last week by the European Commission in connection with illegal agreements made by one of its former portfolio companies, undersea power cable operator Prysmian.
The €302 million in total fines were handed out to several undersea power cable providers that colluded on how to fix the global supply of power cables, rigging bids for undersea cable projects and illegally allocating the global customer base. The companies include most of the world´s largest high voltage power cable producers.
“It is important to recognize that the Commission has chosen to hold GS jointly and severally liable with Prysmian solely under its parental liability doctrine (on the basis that certain GS sponsored funds acquired Prysmian in 2005 and divested their interest gradually until their final exit in 2010),” Goldman said in a statement. “Notably, there is no suggestion that Goldman Sachs or its people had any knowledge or involvement in the purported collusive behavior. Goldman Sachs is considering its rights of appeal.”
The European Commission is levying fines against Goldman Sachs under its parent company liability rules, as during part of the Goldman Capital Partners ownership period between 2005 and 2010, Goldman itself had control of the Prysmian board. The European Commission has deemed this “decisive influence,” making the bank jointly and severally liable when it comes to antitrust fines.
Some smaller investment funds have faced similar Commission fines, and appeals have so far been unsuccessful. Goldman could consider a range of options for its appeal, including trying to place the responsibility for the fine with Goldman Sachs Capital Partners.