The Australian Competition and Consumer Commission launched civil cartel proceedings against Ventia Services (ASX:VNT, NZE:VNT) unit Ventia Australia and Downer EDI (ASX:DOW) unit Spotless over the companies' alleged price fixing activities, the regulator said in a statement Thursday.
The ACCC said that both companies provide services to over 200 Australian Defense Force bases and properties under multi-billion contracts.
The regulator claims that Ventia Australia and/or Spotless "made or attempted to make arrangements or understandings containing provisions which had the purpose, effect or likely effect of fixing, controlling or maintaining the prices at which these services would be supplied to Defense under specific programs of works."
The ACCC said that the alleged arrangement attempts occurred on three separate occasions from April 2019 to August 2022, with two coming from Spotless and one from Ventia Australia, breaching relevant cartel provisions in the Competition and Consumer Act.
Spotless senior executives Jacob Bonisch and Jeffrey Collins and Ventia Australia senior executives Gavin Campbell and Lena Parker were purportedly involved in aspects of the conduct.
For its part, Downer EDI "categorically denies" the allegations as it believes that "neither Spotless nor the two Spotless employees referred to by the ACCC engaged in unlawful conduct," according to a same-day filing with the Australian bourse.
The company said that it takes its compliance and regulatory obligation "very seriously" and is committed to best practice governance and risk management. It plans to defend its position before the courts.
In a separate Australian bourse filing, Ventia said that it does not plan to comment further against the lawsuit as it reviews the allegations.
However, it said that it is "committed to ethical business practices and seeks to uphold the highest standards of governance and risk management in all our operations."
Ventia Services' shares tumbled almost 21% in recent Thursday trade in Australia, while Downer EDI's shares dropped nearly 8%.
Price (AUD): $3.41, Change: $-0.89, Percent Change: -20.75%
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