On the 30 December 2014, the Dutch Authority for Consumers and Markets announced that it had fined CVC Capital Partners and Bencis Capital Partners for their ownership of Dutch flour producer Meneba. Meneba had been convicted of participation in a price and output limiting cartel between the years 2001 and 2007. The case is significant as it is the second major instance of a private equity firm being fined for ownership of an infringing portfolio company after the EU Commission Goldman Sachs/Prysmian power cable case which we reported last year.

What is not clear in the current case is whether (as in Prysmian) the private equity firm were held strictly liable for the infringement of their portfolio company, even when the private equity firm had no knowledge of the infringement in question. It was held in Prysmian that their financial ownership alone was enough to warrant control and therefore establish parent company liability.

We have commented before on the difficulty for parent companies in safeguarding against these fines. The secretive nature of the activity means it may not be visible in any due diligence upon acquisition and the likelihood of the cartel and the fines being levied many years after purchase and even after the ownership period means the parent company can be left completely without redress. Investigating long term insurance options may be the only option for many firms in these situations.

The press release from the Dutch Authority may be found here.