It could be jail for Richard Pratt

Billionaire cardboard king Richard Pratt will stand aside as Carlton Football Club president, it was announced this morning.

Pratt could face a sentence of up to four years in jail if he is found guilty on charges of providing false or misleading evidence brought against him yesterday.

The Visy boss and AFL club Carlton president was charged on summons with giving false and misleading evidence on four occasions to an Australian Competition and Consumer Commission (ACCC) hearing in 2005, contrary of Section 155 of the Trade Practice Act. Each offence carries a maximum penalty of 12 months in jail or a $2200 fine.

The charges relate to statements made by Pratt when he was interviewed by the ACCC earlier this year regarding allegations of cartel conduct by Visy in the packaging industry.

The competition watchdog alleges Pratt lied in that interview when he denied:

• Knowing of cartel arrangements with fellow cartel participant Amcor prior to December 2004.
• That several conversations regarding the cartel had taken place between himself and Amcor executive Russell Jones before that time.

The seriousness of the allegations against Pratt means jail is a very real possibility if he is found guilty on the charges, Addisons Lawyers competition law expert Kathryn Edghill says.

“It wouldn’t be a surprise if the ACCC does push for a criminal penalty – a number of serious offences have been alleged, and for a man like Pratt financial penalties of $2200 won’t be seen to have much of a deterrent affect,” Addison says.

Section 155 is currently one of the few avenues the ACCC can pursue that can result in jail terms for participants in cartel conduct, but that will change once laws to increase penalties for cartel offences planned by the Federal Government are introduced.

“The ACCC has the power to go after people who give false evidence and that is something they will want people to be aware of,” Edghill says. “Combine that with the serious cartel conduct that has taken place, and the ACCC will be likely to sit up and seek serious remedies.”

Pratt has yet to enter a plea in relation to the charges and the ACCC may not face a straightforward task in proving its charges given the higher standard of proof – beyond reasonable doubt – that must be proved in criminal cases.

The case will return to the Melbourne registry of the Federal Court, where the charges have been laid, on 7 July.

Meanwhile Pratt will step aside as Carlton president until charges against him are resolved, the football club has announced this morning.

Carlton Football Club chief executive Greg Swann says vice president Stephen Kernahan will become the club’s acting president in the interim.

Read more about Richard Pratt and Visy.