Abengoa fined $22.5 mln for ethanol benchmark rigging

Source: By Foo Yun Chee, Reuters • Posted: Sunday, December 12, 2021

BRUSSELS, Dec 10 (Reuters) – EU antitrust regulators fined Spain’s Abengoa (ABG.MC) 20 million euros ($22.5 million) on Friday for rigging ethanol benchmarks as part of a crackdown on such practices while investigations into two other companies continue.

The European Commission has levied billion-euro fines in recent years, with regulators on both sides of the Atlantic acting against banks for manipulating financial benchmarks.

It had been investigating Abengoa, Belgian peer Alcogroup and Swedish company Lantmannen on possible rigging of ethanol benchmarks, which are published by energy and commodities information provider S&P Global Platts.

The European Union’s competition watchdog said Spanish engineering and energy group Abengoa admitted taking part in a cartel and coordinated its trading behaviour with other companies from September 2011 to May 2014 and agreed to settle for a reduction in the fine.

The Commission did not name the companies but said investigations were still ongoing.

“Abengoa’s aim was to artificially increase, maintain and/or prevent from decreasing the levels of Platts’ ethanol benchmarks. Abengoa also limited the supply of ethanol delivered to the Rotterdam area,” the Commission said in a statement.

Abengoa said regulators did a detailed analysis of its financial situation and viability plans and agreed to a substantial cut in the fine, with a structured payment plan distributed over several years.

“The fine, which is lower than the amount provided for in the company’s viability plans, does not compromise the restructuring and viability plans currently underway,” the company said in a statement.

Lantmannen, which has previously said it was in settlement talks with the Commission, said it would pursue its rights of defence while continuing to cooperate with the regulator.

“Lantmännen Agroetanol’s financial provision in relation to this investigation is considered sufficient,” the company said in a statement.

S&P Global Platts said there was no finding that any such rigging attempts were successful.

“We maintain that our robust and transparent methodology, and the safeguards we have in place, are designed to ensure Platts publishes assessments that are reflective of the market value of ethanol and the other commodities that we assess,” Dave Ernsberger, its head of pricing & market insight, said in a statement.

Alcogroup did not immediately respond to requests for comment.

Abengoa entered bankruptcy proceedings in February after its creditors refused to extend a deadline to negotiate a restructuring of its 6 billion euro debt pile.

Two rival groups – one led by U.S. private equity fund Terramar and another by retail shareholders – are battling to take control of Abengoa’s main assets, which have been spun off into a separate holding company.

($1 = 0.8877 euros)