Green Environmental Coalition Files SEC Complaint against CEMEX (CX) - cites potential fine of $73 million kept secret.
(Yellow Springs, Ohio August 13, 2001)
Green Environmental Coalition today filed a complaint with the SEC charging that Mexico's CEMEX (CX) company misled its shareholders when it acquired US cement maker, Southdown Inc. CEMEX is the world's third largest cement manufacturer. Southdown was the 4th largest US cement manufacturer.
The Green Environmental Coalition (Coalition) is a non-profit environmental organization based in Yellow Springs, Ohio. The Coalition monitors air and water emissions from various industrial facilities in Ohio.
Prior to acquisition, Southdown operated an industrial facility in Fairborn, Ohio that is closely monitored by the Coalition. The Coalition discovered a 500-acre site owned by the company that contained a 175-acre industrial landfill that was discharging hazardous leachate from a waste product known as Cement Kiln Dust (CKD) directly into a stream. The site is known as Landfill 1.
In 1993 the Coalition filed suit in Federal Court charging that Southdown discharged pollution into the waters of the state without a permit. The case lingered in the court without resolution as a result of numerous stays granted to the Company. In September 1997, the Company transferred title to the 500-acre property to two recently formed corporations for approximately $50 per acre.
In the Company's September 30, 1997 10Q the company states, "The company sold the property that is the subject of these lawsuits to independent third parties. The property was sold "as is where is" and the company assumed no obligations to remediate the property."
Recently, the Company asked the Judge to release them from liability under the Clean Water Act. On August 9th, just 4 days before the trial is to begin, the Judge ruled that the company may be liable for penalties under the Clean Water Act and refused to release Southdown (now CEMEX) from the case.
The Coalition claims that because of the grievous nature of the contamination and the Coalition's belief that the Company has attempted to circumvent Federal Law by transferring title of the contaminated land, the Coalition has asked the Court to impose the maximum penalty of $25,000 per day for every day the pollution occurs from the date of filing in 1993. This number now exceeds 73 million dollars.
The Coalition claims that Southdown failed to properly report the potential liability from Landfill 1 when CEMEX tendered its offer. Further, the Coalition claims that CEMEX failed to conduct proper due diligence. The result is that the Coalition believes that CEMEX has misled its shareholders and transferred Southdown's potential liability to the shareholders.
Detailed information regarding the extent of the contamination and details about the complaint and litigation can be found at http://www.LANDFILL1.com
CONTACT: Green Environmental Coalition
Bruce Cornett, Director
(937) 767 2109
KEYWORD: CEMEX, Financial, Pollution, SEC, environmental, Clean Water Act, environment