Caterpillar is alleged to have engaged in fraudulent and misleading conduct.
MIAMI, July 12, 2024 /PRNewswire/ — Venequip S.A., a Venezuelan company, this week filed a lawsuit seeking more than $100 million in damages from Caterpillar, Inc. In the lawsuit, Venequip alleges that Caterpillar engaged in misleading or fraudulent conduct, including discriminating against Venequip while favoring other dealers, despite repeated oral and written representations otherwise.
One of the largest manufacturers of heavy machinery and engines in the world, including for the construction, mining and gas and oil industries, Caterpillar trades on the New York Stock Exchange and enjoys a market capitalization of over $170 billion.
From its inception in 1927, Venequip acted as Caterpillar’s only authorized distributor in Venezuela. The partnership between the companies lasted for nearly a century.
In its lawsuit, Venequip alleges that Caterpillar engaged in a discriminatory pricing scheme whereby it sold its products to its favored dealers at substantial discounts by as much as 40% and greenlighted these dealers to sell into Venequip’s territory at prices that Venequip could not. Caterpillar implemented this discriminatory pricing scheme notwithstanding that it forbade Venequip from selling Caterpillar products in the United States and had represented to Venequip that Caterpillar’s dealer pricing was generally the same around the world. These representations were false.
Venequip further alleges that Caterpillar went to great pains to conceal its discriminatory pricing scheme.
According to the lawsuit, when Venequip raised questions with Caterpillar upon learning of the discriminatory pricing scheme, CAT did not deny its conduct. Instead, it responded through retaliation. Not only did CAT terminate the relationship and refuse to sell to Venequip, but CAT also barred and/or discouraged other dealers and sellers of CAT equipment and parts from selling to and doing business with Venequip. This deprived Venequip of hundreds of millions of dollars in revenue that would have been generated from the sale of equipment and parts.
“Unbeknownst to Venequip, CAT’s repeated representations to Venequip that CAT would not undermine Venequip in Venezuela were a lie and its effusive praise of Venequip was designed to lull Venequip into believing that CAT was Venequip’s trusted and committed partner,” according to the lawsuit. The lawsuit also states, “CAT’s disloyal, misleading, and fraudulent practices: (a) decimated Venequip’s business, preventing Venequip from selling CAT products and servicing CAT equipment; and (b) harmed consumers of CAT equipment and parts in Venezuela.”
Caterpillar has until the end of July to respond to the lawsuit.
SOURCE Venequip S.A.
