24 Apr 2024 10:32

Severstal, regulator agree to reduce fine in antitrust case against steelmakers by 90%

MOSCOW. April 24 (Interfax) - Severstal and the Federal Antimonopoly Service (FAS) have reached a settlement in the antitrust case against Russian steelmakers that will see the company's fine slashed by 90% to about 900 million rubles from the original 8.7 billion rubles, business daily Vedomosti reported on Wednesday and Interfax sources confirmed.

The Moscow Arbitration Court upheld the legality of the fine of 8.7 billion rubles in January and Severstal filed an appeal. On Tuesday, the Ninth Arbitration Court of Appeal postponed the consideration of the company's motion to approve the settlement with the regulator until May 27. The third parties in the case to dispute the FAS decision are Rosneft , Zvezda shipyard, Gazprom , NLMK and Magnitogorsk Iron & Steel Works (MMK).

A source familiar with the terms of the settlement signed by the parties said that in adjusting the size of the fine under the agreement between the company and the regulator a lower bar for percentage of revenue from hot-rolled steel sales in 2021 was used for its calculation.

Severstal also partially fulfilled the regulator's earlier demands, developing and presenting to the FAS a trade policy for hot-rolled flat steel that sets out principles for pricing on the domestic market for this product and relations with customers, including conclusion of contracts, review of orders, delivery terms and so on, the paper said.

The FAS agreed to repeal some of the orders it issued after investigating the "steelmakers' case," Vedomosti said, citing a source.

In February 2022, the regulator found Severstal and fellow steelmakers NLMK and MMK to have violated antimonopoly legislation by setting and maintaining monopolistically high prices for hot-rolled flat steel products on the domestic market. Prices for hot-rolled steel rose faster than production costs.

Furthermore, the FAS found that the steelmakers' sales volumes on the domestic market did not increase, but profits tripled compared to 2019-2020 figures.

NLMK and MMK, which were fined 6.4 billion rubles and 8 billion rubles respectively, are also challenging the regulator's decisions in court.