In 2013 Jason Ellis, the son of former BHP chairman Jerry Ellis, received the career break of a lifetime. Australia's largest steel company, BlueScope, elevated him from a regional divisional manager in Thailand to one of the most senior positions in the company - the general manager of sales and marketing.
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Within months of assuming his position, one that could have ultimately groomed him to lead the company, Ellis allegedly masterminded a plan to boost the company's ailing profit. It was a plan which court documents now assert involved an attempt to engineer a cartel with several local and overseas competitors to raise the price of steel.
The alleged price-fixing plan devised by Ellis took place in the aftermath of the global financial crisis. During this period, steel prices were severely depressed and were putting pressure on steel companies' earnings.
Back in 2013-14 this was a $2.8 billion market in Australia and one which was, and still is, vitally important to our infrastructure and construction markets.
The attempts to establish a cartel were intended to raise prices and remove effective price competition. The effect of which would be large-scale, serious and ongoing economic harm in the nation's steel industry, according to a court filing made by the Australian Competition and Consumer Commission and obtained by The Age and Sydney Morning Herald.
The filing details an elaborate web of meetings between Ellis (alongside a coterie of his colleagues) and 11 of BluesScope's competitors held over a series of months, which traversed numerous states and spanned three countries.
At least 16 of these meetings were documented by the competition regulator. Ellis even arranged a meeting with one of the largest steel makers in the world - China Steel Corporation.
History now shows that the alleged attempts at price fixing failed even before a whistleblower blew the lid on the plan.
Ellis has since left BlueScope, but for four years he was one of the company's most senior employees in Australia.
He had significant power to direct BlueScope's pricing, particularly in the coated and industrial products division where he was responsible for all domestic and international sales from BlueScope's manufacturing sites, according to the ACCC's concise statement of claim.
Following his appointment in 2013, the ACCC alleges he devised and implemented a strategy to increase the price of flat steel supplied by BlueScope and its competitors.
This involved telling BlueScope distributors that they should agree to price all of their steel products (both BlueScope and imported) at, or by reference to BlueScope's list price.
The plan also allegedly involved encouraging steel distributors to agree to increase their prices across all their products, including imported products.
Ellis and his team provided distributors with an internal BlueScope 'Pricing Summary' which conveyed the increased profits and profit margins distributors stood to make if they purchased BlueScope steel (or imported steel) at a certain price and sold it to their customers at the BlueScope list price.
But this alleged action would not solve the problem BlueScope faced from overseas steel makers selling cheap steel into the Australian market.
According to the ACCC court documents, Ellis formed a different plan of attack - one that the competition regulator described as "carrot and stick".
The carrot was BlueScope's invitation to offshore steel companies to raise the price of their product sold into Australia, and informing these international competitors that BlueScope would do the same.
It also offered to buy the steel that offshore manufacturers were selling into Australia.
The stick - which history tells us was ultimately employed by BlueScope - was to launch anti-dumping claims if the offshore suppliers didn't increase their prices.
A year after the alleged attempts at price fixing took place, Ellis teamed up with another Australian steel maker, then known as OneSteel, to lobby federal politicians to beef up anti-dumping laws.
The BlueScope board was only made aware of the price fixing allegations in 2017 when it was served with notices by the ACCC. It immediately conducted its own internal and legal investigation and concluded that "we do not believe that BlueScope or any current or former employees have engaged in cartel conduct".
Neither BlueScope nor Ellis have filed a defence to the claims made by the ACCC. BlueScope chairman John Bevan said on August 30, the day after the court action was filed, that the company plans to defend the case.
Whether this civil case brought by the ACCC is followed by criminal proceedings is now in the hands of the Commonwealth Director of Public Prosecutions.
If successful it would represent a big scalp for the regulator. But it would be an embarrassment for the NSW government which gifted the company a $60 million payroll tax break in 2015, and the Federal government which also handed the company significant sums under a steel transformation program.
