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Sunday, 22 June 2014

Bernard Wientjes, chairman of employer’s organization VNO/NCW and ‘Most Influential Man in The Netherlands’ has been involved in a longterm, pan-European cartel, according to an official judgment of the European Court of Justice.

Bernard Wientjes, since 2005 the chairman of employer’s organization VNO/NCW, is arguably the most influential man in The Netherlands.

Wientjes is also vice-chairman of the SER (Social-Economic Council), which is a very influential advisory board of the Dutch government, as it binds the social partners: the employer’s organizations, the labour unions and the Dutch government.

Since 2005, when he started as chairman of VNO/NCW, Wientjes has always been an avid defender of: 
  • less regulation for companies in The Netherlands and the European Union;
  • a level playing field for all companies in the whole European Union.
Yesterday, however, the Dutch financial newspaper Het Financieele Dagblad ( came with a remarkable scoop. Bernard Wientjes, as former full owner/ director of the manufacturer of shower cabin panels, Ucosan BV, had allegedly been caught with his hand in the cookie jar.

His company Ucosan BV and – after the takeover of Ucosan – its parent company Villeroy & Boch have been convicted by the European Commission, for being an important part of a long-term, pan-European cartel, concerning bathroom furniture and appliances.

This cartel had been in effect between 1992 and 2004. On 16 September 2013, this conviction by the European Commission has been sustained by the European 
Court of Justice.

The following snippets come from this remarkable FD article:

Wientjes was the executive director / owner of shower cabin panel manufacturer Ucosan in [Dutch city] Roden. In 1989, he sold half of this family company to Villeroy & Boch. Ten years later he sold the rest of Ucosan to the German company.

After this deal had been completed, Wientjes also became an executive manager at Villeroy & Boch. Until 2005, Wientjes was responsible for all bath room products of this company and he remained executive director of Ucosan as well, until 2003.

In 2010, the European Commission penalized Villeroy & Boch, and sixteen other manufacturers of bathroom furniture and appliances, with a penalty amounting to €622 million for making illegal price arrangements. The cartel had been active from 1992 until 2004, when the authorities raided these companies during an anti-cartel investigation.

Of the penalized companies, Villeroy & Boch was fined with the second highest penalty: approximately €72 million. Villeroy & Boch appealed against this penalty, but it was nevertheless fully upheld by the European Court of Justice, even though other accused companies saw parts of their penalties being withdrawn.

Normally, the European Commission publishes in detail the grounds for a cartel penalty. To the amazement of insiders in the matter, however, the publication of this bathroom cartel has been delayed for already four years.

The judgment, in which the European Court of Justice declines the objections of Villeroy & Boch against the penalty, quotes from the confidential penalty resolution by the European Commission. This quote contains a referral to the role of Bernard Wientjes, as well as his private company Wientjes Beheer (i.e. ‘management’), in this cartel case of Villeroy & Boch.

The European Court reveals, as a matter of fact, that Villeroy & Boch regards Bernard Wientjes as the sole perpetrator of Ucosan’s illegal price arrangements.

I have looked up this particular judgment by the European Court of Justice and – in spite of the stately, difficult legal language – there is not a single, unclear word in it, when it comes to:

  • a. the justification of the penalty for Villeroy & Boch, as full owner of Ucosan BV;
  • b. the fact that Villeroy & Boch sees former owner of Ucosan, Bernard Wientjes, as the main perpetrator in this cartel case. 

Here are the most important snippets of this whole must read, 50 page judgment by the European Court of Justice.

1104   Since 1989, Villeroy & Boch holds 50% of the stock in Ucosan, which is active in the area of shower cabin panels. On 1 November 1999, Villeroy & Boch acquired the remaining 50% of the shares in Ucosan, making Villeroy & Boch the single owner of this company.

Ucosan existed of Ucosan Holding BV, with a statutory seat in The Netherlands, which held a.o. 100% of the shares in its German subsidiary Sanitrend Sanitär Handelsgesellschaft mbH. This subsidiary has been renamed to Ucosan GmbH, and subsequently to Villeroy & Boch Wellness, before merging eventually merging with Villeroy & Boch on 24 March 2003. Ucosan Holding BV and Ucosan BV, its fully Dutch subsidiary, still do exist.

1106   Villeroy & Boch did not try to disprove the presumption that it had claimed full control over its (full) subsidiaries Villeroy & Boch Austria, ~ Belgium, ~ Luxemburg, Villeroy & Boch Nederland BV [Netherlands – EL] and Villeroy & Boch France. There was no autonomy whatsoever for these national subsidiaries at setting prices; parts of the invoicing even happened directly on behalf of Villeroy and Boch. For the Ucosan group, their proceedings have been imputed to Villeroy & Boch, as this group was fully owned by Villeroy & Boch since 1 November 1999.

1107 In their joint reply to the ‘announcement concerning the points of objection’, the addressed parties did not object to their legal liability for the proceedings of Ucosan. Implicitely, they even accepted their liability.

1108   In the jointly forwarded arguments, on 10 July 2009, in response to the letter with a full explanation of the facts, Villeroy & Boch challenges its liability for the behaviour of Ucosan after all.

The company states that before 2003 “W.”[undoubtedly this W. refers to Bernard Wientjes –
EL], holder of the other 50% of shares in Ucosan Holding BV before the acquirement of the full share capital in 1999, was the sole director of the company until 2001. Between 2001 and 2003, a second executive director had been appointed, but in case of a dispute, the opinion of “W.” would be decisive, in accordance with an agreement, entered on 16 January 1989.

1109   These arguments cannot be accepted.

First, Villeroy & Boch does not take into consideration, that it has been sole shareholder of Ucosan Holding BV since 1999. The simple fact that one of the executive directors of Ucosan allegedly kept a part of the shares – which has not been proven, as the covenant of 1989, which has been handed over by Villeroy & Boch in support of its claims, has been arranged between legal entity
BEM Wientjes Beheer BV and Villeroy & Boch, as shareholders of Ucosan – cannot act as any legal ground for challenging the presumption that Villeroy & Boch has executed full control over its fully held subsidiary.

Second, the covenant of 1989, handed over by Villeroy & Boch, was arranged at the time that Ucosan was still a joint venture between BEM Wientjes Beheer BV and Villeroy & Boch, causing that it cannot serve as a ground for dismissing Villeroy & Boch of its liability for the behaviour of its subsidiary, while it was the single shareholder of this legal entity at the time.

1110   Ucosan BV took over the whole of the activities of the Dutch subsidiary Villeroy & Boch Nederland BV, which has been subsequently liquidated.

Ucosan was the legal and economic successor of Villeroy & Boch Nederland BV. Villeroy & Boch can be held liable for the behaviour of Villeroy & Boch Nederland BV and its legal and economic successor, Ucosan BV, for the whole duration of the violation, as it held 100% of the shares in Villeroy & Boch Nederland BV and its successor, Ucosan BV, and Villeroy & Boch did not hand over any argument or proof, that challenged the presumption that it formed one single company with these legal entities.

1111   For these reasons, Villeroy & Boch, Villeroy & Boch Belgium, ~ Austria and ~ France have been the addressed parties for this particular judgment, as these parties are legally liable for their own behaviour and that of Villeroy & Boch Nederland BV and, from 1 November 1999, the behaviour of Ucosan, as these entities have all been part of the company that violated the regulation.

[ I apologize for all grammatical errors that I made during the translation from Dutch to English, of this complicated judgment by the European Court of Justice. Besides that, I reject, in advance, any legal responsibity for such errors – EL]

Summarizing, this judgment states in simple words: 
  • It is crystal clear that Villeroy & Boch is held fully liable for its part in the cartel for bathroom furniture and appliances indeed and that any objections of the company in this matter have been totally overruled by the European Court of Justice;
  • It is also crystal clear that Villeroy & Boch tries to put the full blame on Bernard Wientjes: initially as partial owner / director of its subsidiary Ucosan and later as (single) executive director of Ucosan (until 2001), as well as executive manager for the business unit bathroom appliances of Villeroy & Boch (see red and bold text). 
Of course, one can argue justifiably that Villeroy & Boch showed a repelling example of the “duck and cover” strategy, when it came to its own role and liability in this matter. The company tried to put the blame solely on Bernard Wientjes, while denying that the company itself bore any responsibility for the affair.

Nevertheless, a man – Bernard Wientjes – who has been called the most influential man in The Netherlands and 'the national champion of entrepreneurship', as well as an important advocate for the corporate level playing field, has been exposed in an official European Court of Justice judgment as a key figure in a multi million euro cartel.

And that is something that will be etched in our collective memories, when Bernard Wientjes resigns from his job as chairman of employers’ organization VNO/NCW on July 1st, 2014.

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