It's widely expected that the Federal Court will next week agree to impose a $40 million fine on Visy, the company owned by Australia’s third richest man, Richard Pratt, for price fixing. While the press has been quick to point out that $40 million will be the highest fine ever paid by an Australian company, and Victorian premier John Brumby claimed that the penalty was "very heavy", it's worth considering exactly how harsh the proposed penalty is.
According to BRW, Pratt is believed to be worth around $5.4 billion (although that estimate is probably conservative given the private nature of Pratt’s businesses). If Pratt is fined $40 million that represents are 0.75% of his net worth. It should be remembered that Pratt did not confess his crimes until after years of costly investigations and well after his cartel partner, Amcor, fessed up to authorities. Further, Visy was fined $500,000 in 2004 for inducing a rival to not poach its customers, so it wasn’t the company’s first brush with the law.
As a comparison, Australia’s most recent celebrity crook, funnyman insider trader, Steve Vizard, was fined $130,000 for three instances of insider trading. Vizard, who recently sold his Toorak mansion for $18 million is probably worth in the vicinity of $30 million. Vizard, who is considered by many to have escaped too easily, received a penalty which was equivalent to around 0.45% of his wealth.