Australian trade buyer fined in Castle Harlan 'bid rigging' case

Bradken plans to appeal against the ruling, which arose from a complaint filed by private equity group Pala Investments.

Pala, a Switzerland-based group controlled by Russian oligarch Vladimir Iorich, sold Norcast to Castle Harlan in July 2011 for $190 million. Seven hours later, Castle Harlan sold the firm to Bradken, a competitor of Norcast, for $209 million.

Lawyers for Pala alleged that Bradken engaged in "misleading and deceptive conduct" and "bid-rigging" that breached provisions written into competition legislation in 2010. They claimed that Castle Harlan and Bradken agreed as early as March 2011 that the private equity firm would bid for the asset while the corporate stood back.

Nick Grenier, chairman of Bradken, and Brian Hodges, a managing director at the firm, were named personally as co-defendants in the case. At the time of the transaction, Grenier was also deputy chairman of Castle Harlan's Australian affiliate, CHAMP Private Equity.

The basis of Pala's complaint was that Norcast would have been worth more to Bradken than the $190 million sale price because of potential synergies between the two companies.

Bradken said it was never offered Norcast and excluded from the sales process, The Australian reported, and that there was no agreement with Castle Harlan to on-sell the asset.

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