Newspaper article St Louis Post-Dispatch (MO)

Grain Company to Pay Fine of $100 Million

Newspaper article St Louis Post-Dispatch (MO)

Grain Company to Pay Fine of $100 Million

Article excerpt

Archer Daniels Midland Co., one of the largest grain processors in the world, said Monday that it had agreed to plead guilty to federal criminal charges of price fixing and to pay a fine of $100 million.

The fine is by far the largest ever imposed by the Justice Department in a criminal antitrust case. It amounts to three-quarters of one percent of the company's annual sales of $13.3 billion.

ADM, which is based in Decatur, Ill., said in a press release that the settlement resolved "all pending criminal investigations of the company." However, there was speculation Monday that a grand jury that has been investigating the allegations might still indict top executives, including Vice Chairman Michael Andreas, son of Chairman Dwayne Andreas. The Justice Department could not be reached for comment Monday because federal offices were closed for Columbus Day. ADM officials refused to take questions. The case came to light in the summer of 1995 when federal agents raided the headquarters of the company, whose sales top by about $1 billion those of Anheuser-Busch, the world's largest brewer. ADM soon found out that the head of one of its divisions had been working undercover for the FBI for about two years. ADM was accused of price fixing involving two of its products: lysine, an additive in poultry and swine feed; and citric acid, which is used in various foods, beverages and other products. The company said it would not face charges over allegations that it had fixed prices of high-fructose corn syrup, which is used to sweeten soft drinks and is a much bigger part of ADM's business. Investors apparently saw the settlement as good news. ADM stock hit a 52-week high of $22.12 1/2 on Monday before closing at $21.75, up $1.12 1/2 for the day. The stock had been as low as $13.12 1/2, when adjusted for two dividends, in the summer of 1995, said Richard Elam, an analyst for Everen Securities in Chicago. "This kind of news dispels uncertainty," Elam said. …

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