De La Rue hit by US price fixing allegations
Thursday 10 July 2003
The bank note printer De La Rue yesterday warned that its holographics business was under investigation in the US over allegations of price fixing.
Its holographics arm is alleged to have engaged in an illegal price-fixing scheme relating to the supply of the well-known dove holograms for Visa banking cards in 1997.
De La Rue, run by the chief executive Ian Much, said it understood that the US Department of Justice was conducting an inquiry into the allegations although it had not received official notification of the inquiry.
It said, however, that the penalty for such an offence should the allegations stack up could range from 20 per cent of the relevant turnover in the relevant year up to $10m.
Shares in De La Rue dropped nearly 10 per cent, or 25.5p, to close at 235.5p reversing the gains they made earlier in the week after the company said it would be part of a consortium of companies that would produce new bank notes for Iraq.
The allegations against De La Rue came to light on Tuesday in a US securities fraud trial concerning current and former senior executives and directors of American Bank-note Corporation and American Bank Note Holographics (ABNH).
Joshua Cantor, the former president of ABNH, alleged in court that he had had a price-fixing agreement in the US with the individual who was then running De La Rue's holographics business. De La Rue insisted yesterday it was investigating the price-fixing allegations "with urgency" and said it would cooperate "fully" with the relevant authorities.
It also said that the "individual" implicated in the allegations had actually left De La Rue in October of 1999. De La Rue's holographicsmade up about 20 per cent of the £60m of sales its Global Services unit turned out. A De La Rue spokesman said: "Obviously we're taking advice from our legal counsel and our advisers on the matter and we'll co-operate fully."
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