Those damaged by the gas cartel and the wiretapping that was uncovered

“This collusion affected industrial and medicinal clients, covering a wide range of areas (…)”.

That was one of the blunt details that the National Economic Prosecutor’s Office (FNE) gave when uncovering the collusion between the companies Indura and Linde Gas Chile, orchestrated mainly by the general managers of both, Marcelo Torres and Sergio Novelliand David Lori (executive), whose phones were tapped.

It should be noted that these two companies operate in the industrial, medicinal and special gases market; and the collusion between the two occurred between November 2019 and January 2021.

The treatment between the two was as follows: before the clients in which the other company was incumbent, had to avoid competing effectively, either by abstaining from participating in the respective tender or quotation, offering deliberately high prices so as not to win the business, withdrawing from the process if the client was interested in the proposal, or withdrawing from the offer presented in case of be awarded.

“In cases where both companies served the same client, each one had to maintain that portion that it already supplied,” added the FNE.

Companies in the sector metallurgical, paper, forestry, construction, aquaculture, food, laboratories, mining, oil refinery, steel, glass and hospital, among others, they appear – according to the FNE – among those affected.

According to a document from the FNE, for example, the Félix Bulnes hospitals (Metropolitan region), the Quellón hospital and the SGS Chile Limitada Sociedad de Control laboratory would have requested quotes and services from Linde Gas Chile.

Regarding contacts with the facility located on Isla Grande, the FNE detailed that “in January 2021, this hospital contacted Linde requesting a quote for a possible direct contract that could cover all the hospitals of the Chiloé Health Service (… )”.

In the mining sector, the Luksic Group mining company (Antofagasta Minerals) was targeted, which in November 2019 began a bidding process “for the provision of industrial gases in its four deposits. Antucoya, Centinela, Zaldívar were attended to by Linde; and Los Pelambres, by Indura.

Vidrios Lirquén is also indicated as affected.

The FNE, although it addressed some cases, stressed that many companies in various sectors were damaged by this collusion.

He emphasized that as there are hospitals that requested quotes and services from Indura and Linde Gas Chile, “The seriousness of the crime becomes even more evident when considering that the violation was contemporary with the Covid-19 pandemic that affected Chile (…), where medicinal oxygen played a key role in the treatment of said disease and was an essential input for the correct functioning of the country’s health system.”

The FNE said that the evidence it was able to collect shows that, around April 2020, “Marcelo Torres and Sergio Novelli reaffirmed the understanding about how they should behave in the market, making present the need to maintain a clearer customer respect regime in order to operationalize the agreement.”

The FNE investigation

In a statement, the FNE stated that This investigation was born thanks to a complaint, by which authorization was obtained to intercept telephone lines of those involved, which later made it possible to raid their private homes, “disrupting a cartel that was in full execution.”

The agreement began after a meeting between both general managers in November 2019, which took place in a cafe in Las Condes.

Indura and Linde began to forge an understanding that allowed them to finally share their clients, through a “gentlemen’s agreement” or “non-aggression” pact.

The FNE reported that, in an intercepted phone call, the executives of one of the companies even referred to this agreement as a situation of “peace and love” between Indura and Linde.

To comply with the agreement, companies refrained from participating in tenders or quotes, they also offered high prices so as not to be awarded or they withdrew from processes if the client was also interested. Finally, they still withdrew offers if they were chosen.

As the investigation progressed, Linde and his executives approached the FNE to acknowledge their participation and provide the background information they had, in order to access the compensated denunciation.

For all, The FNE requested fines for tax benefits for a total of 37,999 Annual Tax Units (UTA), which is equivalent to US$31.3 million ($29,841 million).

Of this total, US$31.2 million ($29,732 million) correspond to Indura and US$114,392 ($109 million) to its general manager.

However, Linde and its executives were asked to exempt them from fines for complying with the requirements to access the compensated denouncement.

 
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