Goldman Sachs is set to be fined early next year in a European Union antitrust probe into an underwater power cables cartel that tests regulators’ ability to penalize private-equity investors.
Bloomberg reports that Prysmian SpA, an Italian cable maker that Goldman Sachs Capital Partners bought in 2005, and the bank are among as many as 11 companies that face fines in the four-year-old probe, according to three people familiar with the case who requested anonymity because the process is confidential. The lender has said that the private-equity unit wasn’t aware of efforts to rig prices or share markets by companies that started before it bought the company.
The EU has become more aggressive in holding parent companies liable for bad behavior at subsidiaries, backed by several court rulings. Private equity owners, such as Goldman Sachs, haven’t managed to convince regulators that they should be treated differently.
'There is a tendency of private equity firms to think that because they are financial investors they aren’t in the same category as industrial group parent companies, but so far the case law on parental liability does not distinguish between financial and other investors,' said Jay Modrall, a Brussels-based lawyer at Norton Rose Fulbright.
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