Caterpillar is alleged to have engaged in fraudulent and misleading
conduct.
MIAMI, July 12,
2024 /PRNewswire/ -- Venequip S.A., a Venezuelan
company, this week filed a lawsuit seeking more than $100 million in damages from Caterpillar, Inc. In
the lawsuit, Venequip alleges
that Caterpillar engaged in misleading or fraudulent conduct,
including discriminating against Venequip while favoring other
dealers, despite repeated oral and written representations
otherwise.
One of the largest manufacturers of heavy machinery and engines
in the world, including for the construction, mining and gas and
oil industries, Caterpillar trades on the New York Stock Exchange
and enjoys a market capitalization of over $170 billion.
From its inception in 1927, Venequip acted as Caterpillar's only
authorized distributor in Venezuela. The partnership between the
companies lasted for nearly a century.
In its lawsuit, Venequip alleges
that Caterpillar engaged in a discriminatory pricing scheme whereby
it sold its products to its favored dealers at substantial
discounts by as much as 40% and greenlighted these dealers to sell
into Venequip's territory at prices that Venequip could not.
Caterpillar implemented this discriminatory pricing scheme
notwithstanding that it forbade Venequip from selling Caterpillar
products in the United States and
had represented to Venequip that Caterpillar's dealer pricing was
generally the same around the world. These representations were
false.
Venequip further alleges that
Caterpillar went to great pains to conceal its discriminatory
pricing scheme.
According to the lawsuit, when Venequip raised questions with
Caterpillar upon learning of the discriminatory pricing scheme, CAT
did not deny its conduct. Instead, it responded through
retaliation. Not only did CAT terminate the relationship and refuse
to sell to Venequip, but CAT also barred and/or discouraged other
dealers and sellers of CAT equipment and parts from selling to and
doing business with Venequip. This deprived Venequip of
hundreds of millions of dollars in revenue that would have been
generated from the sale of equipment and parts.
"Unbeknownst to Venequip, CAT's repeated representations to
Venequip that CAT would not undermine Venequip in Venezuela were a lie and its effusive praise
of Venequip was designed to lull Venequip into believing that CAT
was Venequip's trusted and committed partner," according to the
lawsuit. The lawsuit also states, "CAT's disloyal,
misleading, and fraudulent practices: (a) decimated Venequip's
business, preventing Venequip from selling CAT products and
servicing CAT equipment; and (b) harmed consumers of CAT equipment
and parts in Venezuela."
Caterpillar has until the end of July to respond to the
lawsuit.
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SOURCE Venequip S.A.