Jul 3 2006
The European Court of Justice (ECJ) has announced its ruling on the graphite electrode case and changed both the verdict of the European Court of April 29, 2004 as well as the ruling of the European Commission of July 18, 2001 to €75.7 million. With this decision the ruling becomes legally binding.
The judgement of the ECJ does not reflect the internationally accredited principle of double jeopardy (ne bis in idem). In 1999 the US Department of Justice imposed a fine against SGL Carbon in the same case. Therefore and despite the reduction of the fine in the first juridical instance, SGL sought principal ruling by the ECJ. Based on expert opinions of judicial science and practice SGL Carbon was confident that the ECJ would substantially reduce the fine under the principle of ne bis in idem. The ECJ however did not do this in spite of many strong legal arguments, and ultimately decided to side with the European Commission.
Due to this ruling the Company will now undertake adjustments in its provisions, leading to a negative impact on EBIT in the second quarter of €23.5 million and on the financial result of €12.7 million.
As reported in April, the fine together with accumulated interest have been cash funded with the EU Commission without accepting the fine. Today’s verdict therefore only has a negative cash impact of €8.5 million in the second quarter. SGL maintains its guidance on net financial debt for the year end.
These measures will be implemented in the 2nd Quarter 2006 balance sheet and profit and loss statement on which the Company will inform on July 26, 2006 within the framework of our half year result reporting.
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