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ADM to plead guilty
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October 14, 1996: 10:09 a.m. ET
Company agrees to pay $100 million to settle price-fixing case
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NEW YORK (CNNfn) - Archer Daniels Midland has agreed to plead guilty to two criminal charges and pay $100 million in penalties related to the alleged price-fixing of agricultural products.
Four years after federal authorities launched an inquiry into the sale of lysine and citric acid, ADM said it will pay a $70 million fine in the lysine case and $30 million fine in the citric acid case. The deal resolves all outstanding federal investigations of the company, including one involving alleged anticompetitive practices in the sale of corn syrup.
"With this matter behind it, ADM will now be able to focus exclusively on growing its business and maximizing shareholder value," the company said in a statement.
Lysine and citric acid are both corn-derived products. Lysine is used as a feed supplement for livestock. Citric acid is used to make soft drinks and detergents.
As part of the plea arrangement, the government agreed to drop the inquiry into the $3 billion corn syrup market. Experts said this potentially was the most damaging investigation because ADM has a bigger financial interest in the citric acid market.
The price-fixing schemes involved ADM along with Japanese companies Ajinomoto Corp. and Kyowa Hakko Kogyo Co. and the U.S. subsidiary of South Korea's Sewon Co.
ADM, which has already agreed to pay $90 million to settle shareholder and anti-trust lawsuits, delegated a committee of seven outside company directors last year to deal with federal authorities. The committee was given the unusual authority to reach a settlement on its own.
The company's statement did not say how its agreement with federal authorities will affect a separate inquiry into alleged misconduct by ADM executives.
Prosecutors have previously informed Michael D. Andreas, ADM's executive vice president, and Terrance S. Wilson, president of ADM's corn-processing unit, that they intended to seek indictments against the two executives. An interesting twist is that Andreas is the son of ADM Chairman Dwayne O. Andreas.
The company could be required to cooperate with authorities in the prosecution of executives.
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