29th Aug 2018 15:07
LONDON (Alliance News) - Smurfit Kappa Group PLC said Wednesday the Venezuelan government has taken temporary control of its subsidiary business and detained two employees.
The business of Smurfit Kappa Carton de Venezuela, or SKCV, will be under government control for the next 90 days following a number of allegations. These allegations were made after a two-day inspection of SKCV and are entirely refuted by Smurfit.
"In the event that the announced action continues, Smurfit Kappa Group is fully committed to protecting the interests of its stakeholders," the company said.
SKCV represented less than 1% of the FTSE 100-listed packaging company's earnings before interest, taxation, depreciation, and amortization in the first six months of 2018.
However, as this business is no longer being managed by SKCV, it cannot manage its affairs or guarantee business standards compliance from Tuesday onwards, the company said.
"SKCV is not responsible for the use of its installations, machinery and equipment, its employees' safety, that of its surrounding communities, any environmental impact, or the quality of the paper and packaging manufactured in the operations," said Smurfit.
Smurfit also said that it is "making all possible efforts" to secure the release of the two employees who have been detained by the government.
Shares in Smurfit Kappa were down 1.3% at 3,248.00 pence per share on Wednesday.
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