The settlement relates to the German subsidiary Danfoss Flensburg GmbH, in which trusted employees and against the European competition rules of 2004 to 2007, exchanged information with competitors in an attempt to coordinate prices on certain household compressors and light commercial compressors sold in Europe.
Niels B. Christiansen, President & CEO of Danfoss, says with regret: “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.”
According to Niels B. Christiansen, this 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,” says the President and CEO.
Danfoss first became aware of the case when the European Commission made unannounced inspections of several of the company’s offices in February of 2009, and since then the Group has cooperated with the European Commission and the competition authorities in a number of countries in order to get to the bottom of the case. Earlier this year, Danfoss entered a plea agreement with the American Justice Department for three million USD, whereas the competition authorities in New Zealand and Canada decided to end their investigations. 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.
For further information:
Markela Dedopoulos, Vice President, Corporate Communication & Reputation, mobile: +45 2337 6590
e-mail: MDED@danfoss.com