A Johannesburg-listed automotive-parts group has begun confronting the cost of a European battery-cartel case after its Romanian subsidiary reportedly made the first payment towards a €20.218 million, approximately $24 million, fine.
Rombat made the payment after it and parent company Metair Investments failed to persuade the European Union’s General Court to suspend enforcement, specialist legal publication *Takyon *reported.
Metair and Rombat are continuing to challenge the European Commission’s underlying infringement decision. The court’s refusal to suspend payment did not decide that substantive appeal.
**A seven-year investigation**
The European Commission fined automotive starter-battery manufacturers and their industry association approximately €72 million after an investigation lasting more than seven years.
The Commission concluded that companies including Rombat, Exide and FET used a pricing mechanism that increased the cost of batteries sold to vehicle manufacturers.
According to the Commission, the companies created and circulated a surcharge linked to the price of lead, an important battery input.
The arrangement allegedly allowed manufacturers to pass more of their lead costs to customers while coordinating their approach.
Rombat received a €20.218 million fine after benefiting from a 30% reduction for cooperating with the investigation.
Of that amount, Metair and an intermediate holding company are jointly and severally liable for €11.557 million.
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Joint liability means the Commission can seek that portion from the parent companies if Rombat does not pay it.
**Payment over 51 months**
The Commission allowed Rombat to pay the penalty over 51 months rather than in a single transfer.
The original schedule called for a first instalment of approximately €4.2 million, followed by additional payments carrying interest linked to the European Central Bank’s rate plus 1.5 percentage points.
Takyon reported that the first instalment has now been paid. Metair should confirm the precise amount, payment date and source of the funds.
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The company must also explain whether the payment was made from Rombat’s own cash or financed by its South African parent.
**Why the appeal did not stop payment**
Rombat and Metair asked the EU court to suspend enforcement while their challenge to the Commission’s decision continued.
Interim suspension requires applicants to demonstrate urgency and the likelihood of serious and irreparable harm.
The court found that the companies had not satisfied the conditions necessary for immediate relief. That decision left the payment schedule in force.
It did not determine whether the Commission’s conclusions were legally correct. The substantive case could continue for as long as two years, according to Metair.
If the companies ultimately succeed, some or all of the penalty could be reduced or returned. If they fail, the outstanding instalments and interest will remain payable.
The case shows how conduct inside a European subsidiary can create a material financial liability for a South African-listed parent thousands of kilometres away.
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