Smurfit’s Venezuelan operation seized by government

The list of charges the company faces includes price fixing, speculation and corruption.


The FTSE 100 firm’s shares edged down (Kirsty O’Connor/PA)
The FTSE 100 firm’s shares edged down (Kirsty O’Connor/PA)

Venezuela’s socialist government has seized control of packaging firm Smurfit Kappa’s operations in the country and detained two employees over allegations including price fixing and destabilising the economy.

Smurfit said in a stock market announcement that its subsidiary Smurfit Kappa Carton de Venezuela (SKCV) will be under government control for the next 90 days.

The list of charges the company faces includes price fixing, speculation, boycott, corruption and destabilising the nation’s economy, according to a Venezuelan government website.

In the event that the announced action continues, Smurfit Kappa Group is fully committed to protecting the interests of its stakeholders
Smurfit

It follows a two-day inspection of SKCV.

All the allegations are entirely refuted by Smurfit.

“In the event that the announced action continues, Smurfit Kappa Group is fully committed to protecting the interests of its stakeholders,” the company said.

SKCV represented less than 1% of the FTSE 100-listed packaging company’s earnings in the first six months of 2018.

Smurfit said that it is “impossible” for SKCV to manage its affairs or guarantee business standards compliance from Tuesday onwards.

“SKCV is not responsible for the use of its installations, machinery and equipment, its employees’ safety, that of its surrounding communities, any environmental impact, or the quality of the paper and packaging manufactured in the operations,” said Smurfit.

Smurfit also said that it is “making all possible efforts” to secure the release of the two employees who have been detained by the government.

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Shares in Smurfit Kappa were down 1.5% on Wednesday afternoon.

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