The scandal has already knocked eight per cent off the company's shares. Amcor has now accepted the resignations of chief executive Russell Jones and Australasian head Peter Sutton, and has promised to cooperate with ongoing investigations.
Investigations into possible collusion began after the Amcor filed a lawsuit seeking the return of confidential information taken from company by five top people who had quit its Australian cardboard box division. Last month, the Federal Court ordered the former executives to return any such confidential information.
On19 November, solicitors for the former executives delivered material tothe company's solicitors that suggested a possible breach of competition laws. The company's board resolved to refer the material which it had to the Australian Competition and Consumer Commission (ACCC) and to fully cooperate with any investigation which the ACCC may undertake.
The board also resolved to undertake its own investigation of the matter. This confirmed the allegation that certain of its officers and employees appeared to have entered into and given effect to arrangements that constituted cartel conduct in the corrugated box business.
These findings made the position of both Jones and Sutton untenable.
Amcor has announced that chairman Chris Roberts is to become executive chairman, while general manager of operations Louis Lachal is to become acting chief operating officer while the company searched for new chiefs.
"It is a bit of a shock," Shaw Stockbroking analyst Brent Mitchell told the UK's Financial Times. "Certainly the resignations will have a major short-term effect on the group."
Ousted CEO Jones was at the cutting edge of Amcor's transformation into one of the world's top five packaging groups since taking over in 1998. The company said it was not yet able to assess the financial implications of the announcement, but claimed that performance was in line with its forecast for 20 per cent earnings growth in the two years to June 2006.
The corrugated box division accounted for about 9 per cent of the group's A$10.4 billion (€6bn) sales in fiscal 2004 and about 8 per cent of the group's A$831 million in operating profit.
Amcor stock fell 7.8 per cent to a low of A$6.95 after its shares came off a trading halt. But Mitchell told the FT that he believed the scandal would not affect Amcor's overseas operations adversely, and that it would only be the Australian operations that would feel any significant effect.
The company claims that as these matters are the subject of pending court proceedings and current regulatory investigation, it is not in a position to answer any further questions on the matter.