CADE carries out dawn raid to investigate alleged resins cartel in the states of São Paulo, Espírito Santo, and Paraná
Search and Seizure
The General Superintendence of the Administrative Council for Economic Defense - CADE, carried out on 21 May dawn raids in 10 companies’ headquarters and offices, located in 12 cities of the states of São Paulo, Espírito Santo, and Paraná. The operation is part of the investigation of an alleged cartel in the resins for coating and composite market.
The resin for coating is used in the manufacturing of products such as architectural paints. The polyester and phenolic resin are used in the manufacturing of composites materials, such as water tanks, pools, and laminates for the nautical and automotive industries.
The dawn raid was authorized by the Federal Justice due to the existence of evidence consistent with the ones present in the practice of collusion. According to preliminary investigations, the companies exchanged commercially sensitive information, worked together sharing the market share and fixed prices for resins sale. The anticompetitive practices have been possibility adopted since 2004.
The alleged illicit agreements were made through phone calls, e-mails, documents, and in-person meetings. The cartel organization would have been organized in two phases: first the companies’ executives would define the agreements’ general rules, and then the employees would implement the managers’ decisions settled in previous meetings.
There is evidence that the meetings of the operational level were held once a week, in places such as hotels, shopping centers, and in social and corporative events between 2010 and 2012.
The dawn raid was carried out simultaneously in 14 targets, aiming at collecting evidences to enlighten the investigations. The operation was named "Metanoia", derived from the Greek technical term used in business administration, and also used as a code by the alleged cartel members to disguise the exchange of information.
The Metanoia Operation had the participation of almost 100 of CADE’s employees, of the Federal Police, of Public Prosecutors’ Office and court officials. The raided documents will be analyzed by CADE’s General Superintendence. An Administrative Proceed will be initiated if the evidences are confirmed.