Competition Commission of South Africa v RSC Ekusasa Mining (Pty) ltd and Others (65/CR/Sep09) [2012] ZACT 82; [2012] 2 CPLR 296 (CT) (19 September 2012)

COMPETITION TRIBUNAL OF SOUTH AFRICA
Case No:65/CR/Sep09
In the matter between:
THE COMPETITION COMMISSION OF
SOUTH AFRICA Applicant
And
RSC EKUSASA MINING (PTY) LTD First Respondent
AVENG (AFRICA) LTD t/a DURASET Second Respondent
DYWIDAG SYSTEMS INTERNATIONAL
(PTY) LTD Third Respondent
VIDEX WIRE PRODUCTS (PTY) LTD Fourth Respondent
Panel : Norman Manoim (Presiding Member),
Yasmin Carrim (Tribunal Member)
Merle Holden (Tribunal Member)
Heard on : 31 October – 04 November 2011
16 – 24 January 2012
20 and 21 February 2012
Order issued on : 19 September 2012
Reasons issued on : 19 September 2012
Reasons for Decision
1] This case involves an alleged cartel between four firms who
manufacture roof bolts for the mining industry.
1

2] The Competition Commission (‘Commission’) has brought this
complaint referral to the Tribunal pursuant to information it received
from one of the respondents as a part of a leniency application.
3] The firm in question was the first respondent, RSC Ekusasa Mining
(Pty) Limited (‘RSC’), which received corporate leniency from the
Commission through its Corporate Leniency Policy (‘CLP’). The second
respondent, Aveng (Africa) Limited, which trades as Duraset
(‘Duraset’), reached a settlement with the Commission prior to the
matter being heard by the Tribunal. This settlement was made an order
of the Tribunal on 25 August 2010. 1
4] The case before us therefore proceeded against the remaining two
respondents who are the third respondent, Dywidag-Systems
International (Pty) Limited (‘DSI’) and the fourth respondent, Videx Wire
Products (Pty) Limited (‘Videx’).
5] The Commission’s case was that the four respondents had colluded
around tenders and the allocation of customers in contravention of
sections 4(1)(b)(ii) and (iii) of the Competition Act, Act 89 of 1998 (‘the
Act’) In its complaint referral the Commission suggests that a cartel
may have existed in this industry since the 1990’s. It also alleges that
the collusion may have continued until at least 2008. However the
incidents referred to in the referral in relation to the two respondents in
question, were limited to the 2004 to 2006 period.
6] As we discuss below, the defence taken by both respondents is two-
fold:
1) whilst they admit many of the contraventions, they allege that these
practices ceased more than three years before the initiation of the
complaint in this matter by the Commission and hence they are
1 In terms of the settlement agreement Aveng Ltd agreed to pay an administrative penalty of R21 900
000 which was 5% of Duraset’s total annual turnover for the financial year ending 2008. Duraset had

also applied for a ‘marker’ in terms of the CLP, but was presumably second in line and did not benefit.
See Commission initiation statement record C2 page 561
2

subject to the limitation on bringing an action set out in section
67(1) of the Act.
2) in relation to one of the contraventions, alleged to have occurred
within three years of the initiations, they allege they were not
involved and, alternatively, that as a matter of fairness, this aspect
of the Commission’s case was not initially brought against them in
the referral, but against the two other respondents. Although the
Commission sought to amend its referral to include them, it did so
only at the close of the case. The respondents argued that the
Commission was not entitled to amend its referral at such a late
stage. 2
Background
7] On 26 September 2008, Murray and Roberts Limited filed a leniency
application in terms of the Commission’s CLP on behalf of RSC, which
at that time was its wholly owned subsidiary.3
8] Pursuant to this leniency application, the Commission initiated a
complaint on 26 January 2009 against the four respondents. 4 This date
becomes significant for the purpose of the section 67(1) defence.
9] On 30 September 2009, the Commission referred the complaint to the
Tribunal.
10]We heard the case from 31 October to 04 November 2011 and then
later, from 16 to 24 January 2012. Final argument was heard on 20 and
21 February 2012.
11]The Commission called the following witnesses; Allen Koszewski and
2 DSI had in its pleadings also raised a defence of non-joinder, alleging that acts attributed to it, were
the acts of its one time subsidiary, Mandirk. This non-joinder point was abandoned at the
commencement of the hearing. See transcript page 11.
3 Complaint referral founding affidavit paragraph 31. RSC has since been sold to the Barnes Group by
Murray and Roberts. Transcript page 20.
4 Ibid, paragraph 34. See Record, Bundle C2 page 560-1.
3

Neville Henderson of RSC, Hannes Bornman of Duraset and Martin
Cawood, formerly of RSC.5 DSI called its managing director Nigel
Henson and Lucas Van der Merwe, the latter formerly with RSC and
now with DSI. Videx called its managing director Leon Le Roux.
12]At the conclusion of the case, the Commission brought an application
to amend its referral. The respondents opposed the application and
filed replies. We did not hear oral argument on this application as we
have concluded that we could decide this matter on the papers. 6 This
issue is discussed more fully below.
Commission’s case
13]Although the referral deals with the actions of all four respondents, we
confine ourselves to setting out the Commission’s case against DSI
and Videx.
14]The Commission alleges in respect of DSI that:
i) It was involved in bid rigging in respect of two reverse auction
tenders put out by Anglo Platinum in 2004 and 2005. (Complaint
referral, paragraphs 52-57);
ii) It was involved in an attempt to collude with Duraset in respect
of allocating the business of Sasol and Xstrata. (Referral
paragraphs 58-60);
iii) It was involved in an agreement to bid very low prices for a
tender from Goldfields in a bid to punish Duraset. (Referral
paragraphs 63- 66);
iv) Although not alleged in the complaint referral, in the amendment
application the Commission alleges that DSI attended a meeting
in respect of an Anglo Coal tender in 2006 in which it allegedly
agreed to collude and assist RSC to increase its margins at
Anglo Coal. (See amendment application, paragraphs 62.1 to
5 Earlier, the Commission had provided a witness statement from Johan Smit of Duraset, but it did not
call him as a witness.
6 Strictly speaking we heard some oral argument on the final day of hearing, but as the Commission
had not yet filed its application to amend yet, the argument was limited.
4

62-8); and
v) In June 2008 DSI was alleged to have been involved in a cover
pricing arrangement in respect of a Goldfields tender involving
RSC and Videx.
15]The Commission alleges that in respect of Videx that:
i) It was involved in bid rigging in respect of two reverse auction
tenders put out by Anglo Platinum in 2004 and 2005;
ii) It approached Duraset in an attempt to get an agreement on
prices to be quoted for a tender put out by Lonmin in May 2004.
(Referral paragraph 51);
iii) It was involved in an agreement to bid very low prices for a
tender from Goldfields in a bid to punish Duraset (Referral
paragraphs 63- 66);
iv) Although not alleged in the complaint referral, in the amendment
application, the Commission alleges that Videx attended a
meeting in respect of an Anglo Coal tender in 2006 in which it
allegedly agreed to collude and assist RSC to increase its
margins at Anglo Coal. Videx in particular is alleged to have put
in a sham bid. (See amendment application paragraphs 62.1 to
62-8);
v) Attempted, albeit unsuccessfully, to fix prices with RSC on a bid
for a tender from Harmony in October 2005 so that Videx could
win the bid. (Referral paragraph 67-9); and
vi) In June 2008, Videx was alleged to have been involved in a
cover pricing arrangement in respect of a Goldfields tender
involving RSC, and DSI. (Referral paragraph 72).
16]We have approached the Commission’s case in three parts. First, we
deal with agreements that are subject, on the respondents’ case, to the
defence that they are time barred and where we accept that the
respondents are correct in their submissions on this point. Second, we
deal with one meeting and arrangements that followed it, that may not
5

be successfully resisted on this ground, but where we have found that
the Commission has not fairly made out its case on this aspect as
against these two respondents. We refer to this as the Anglo Coal
case. Finally, we deal with a bid rigging case in respect of Anglo
Platinum where the defence that the claim is time barred is again
raised, but we consider unsuccessfully.
Part 1
Allegations of cartel arrangements that are time barred
17]In terms of section 67(1) of the Act:
“A complaint in respect of a prohibited practice may not be
initiated more than three years after the practice has ceased.”
18]A ‘prohibited practice’ is defined in the Act as “a practice prohibited in
terms of Chapter 2” which includes all contraventions listed under
section 4.
19]The Commission initiated its complaint on 26 January 2009. 7 This
effectively means that if unlawful conduct had ceased at any time three
years prior to that date, no proceedings could be instituted against the
firm responsible. We will refer to this date from now on as the cut-off
date.
20]In the complaint referral, the prohibited practices alleged, fall into two
categories; contraventions of either sections 4(1)(b)(ii) or (iii) of the Act.
21]We set out the relevant sub-sections below:
4(1) An agreement between, or concerted practice by, firms or a
decision by an association of firms, is prohibited if it is between parties
in a horizontal relationship and if –
(a).....
7 See Bundle C2 page 560.
6

(b) it involves any of the following restrictive horizontal practices:
(i).....
(ii) dividing markets by allocating customers, suppliers,
territories, or specific types of goods or services; or
(iii) collusive tendering.
22]There is no dispute that the agreements that underpinned most of
these contraventions, were entered into on a date prior to the cut-off
date. However that does not completely dispose of the question of
whether the firms can still be held liable. Section 67(1) is carefully
worded. Its emphasis is on when the practice ‘ceased’. If an agreement
in respect of a practice is entered into before the cut-off date, can the
practice still continue after that date and in that sense, be deemed not
to have ceased? If it can, what conduct must manifest itself for the
practice to be said to continue?
23]We deal with an analysis of what this means more fully later. For the
time being we will examine each practice alleged, with an eye on when
it may be considered to have ceased.
24]If the case against DSI and Videx was that they formed part of a single
conspiracy to rig tenders and allocate customers for a period that
continued to have effects pursuant thereto for a period of time
subsequent to the cut-off date, then an argument could be made the
limitation section did not apply, as the practice – the single conspiracy -
had not ceased.
25]The Commission has not proved the existence of one single conspiracy
involving all the respondents; although its complaint referral, could, in
parts, be read in this way 8. Despite this approach in the referral, during
8 In the founding affidavit, various paragraphs can be read to suggest the existence of a single
conspiracy; e.g. “...a cartel in supplying roof bolts may have started during the 1990’s” paragraph 36;
“In more recent years the cartel was resuscitated ....” ( paragraph 38.1); and a reference to “honouring

old agreements” paragraph 38.8; and then at the end “... these cartel meetings continued until at least
October 2007..” paragraph 70)
7

the hearing it sought to prove each of these separate incidents as a
self-standing contravention. Undoubtedly attempts were made by the
respondents to carve the industry up by market share or product, on
several occasions, but these discussions even the Commission’s
witnesses concede, foundered.9
26]But in its heads of argument, the Commission appears to have
persisted with its single conspiracy agreement. It argued that as there
was evidence of the conduct persisting, post 26 January 2006 and that
conduct of one form or another persisted into 2008, the prescription
point was bad.10
27]The submissions made in support of this point are sparse. We
understand the Commission to be arguing here, although it does not
say so expressly, that the cartel was a continuous agreement, and that
if it’s very manifestations from time to time, in the form of fresh acts of
meeting or collusion, occur after the cut-off date, they pull past actions
through the prescription gate; as there is a single conspiracy,
manifesting itself episodically in subsidiary agreements, as opposed to
episodic manifestations of collusion, not linked to a single conspiratorial
agreement.
28]Whilst such an argument may be correct theoretically, it is not the case
that its witnesses have testified about. 11 Rather, their evidence
confirmed by the respondents, were that there were a series of
episodic agreements that constituted individual contraventions.
29]For this reason the case has to be looked at as a series of single
9 An example of such an attempt can be seen in an email from RSC’s Henderson to the other players in
August 2004 addressed to all four respondents when he attempts to get each firm to make its volumes
available on a spreadsheet. The email is headed “Roof bolt market share.” See Record Bundle C2 page
595.
10 Commission’s heads of argument, paragraphs 155-8.

595.
10 Commission’s heads of argument, paragraphs 155-8.
11 As an example Koszewski testified that “It became clear by the end of calendar year 2005 that the
cartel activities had failed and also what had been proved is that the individual respondents, either
singularly or collectively, could hurt each other...in June of 2005 RSC Ekusasa lost its remaining
portion of the Sasol contract and also the Anglo Coal contract.” Transcript page 23.
8

tender conspiracies, which occurred at different moments in time;
mostly between 2004 and 2005.
30]DSI admits to involvement in collusive activities, but only from
May/June 2004 to May 2005. 12 The various tenders it admits to
colluding on were; two Anglo Platinum tenders, and a tender for Xstrata
in May 2005. It also admits colluding to prevent Duraset from winning a
tender from Goldfields, but denies that this conduct is a contravention
of the Act.
31]DSI argued that by the time it entered the market in 2002, whatever
was left of the earlier cartel had failed. It relied for this proposition on
the evidence of – Allen Koszewski from RSC and Hannes Bornman of
Duraset who were called as Commission witnesses. 13 DSI argued that
any later arrangements to which it acceded were ad hoc in nature and
that “...for the rest there was no cartel. ”14 DSI also admitted that it
attended meetings during 2004 at which the four respondent firms
attempted to divide the market up, but states that these endeavours
were unsuccessful and did not result in an agreement to divide the
market.
32]We now consider the ad hoc arrangements it admitted to.
Xstrata contract
33]DSI had concluded a contract with Sasol Mining in June 2004. 15 It
claims to have won this business before any collusive activity on its
part. In terms of the arrangement it had secured the right to supply
12 Answering affidavit, record page 64, paragraph 56.1.
13 Koszewski transcript page 23 and Bornman transcript pages 719, 755-6 and 763. Bornman’s
clearest formulation in his oral testimony on this point is the following: “Look all I can say is that I
don’t think that at any point in time a cartel existed as in the stricter sense of the word. There were
(sic) co-operation during tender processes, but in the sense that we have got a formal agreement
amongst parties that now we are going to work together that’s going to happen that never existed.
( Transcript 719)

( Transcript 719)
14 DSI Heads of argument, paragraph B I 1 page 25.
15 See Bundle C3 page 849, letter from DSI’s attorneys to Sasol, dated 7 July 2005.
9

75% of Sasol Mining’s roof bolt requirements. The remaining 25% was
awarded to Duraset in May 2005. It was a term of the agreement
between Sasol and DSI that Sasol could take away 15% of DSI’s
contract entitlement and award it to another firm, if DSI could not match
the latter’s prices. Duraset quoted prices which were lower than those
of DSI. DSI could not match them. In August 2005 Sasol awarded 15%
of the contract to Duraset.16
34]Versions on what happened next differ. According to Nigel Henson of
DSI he then made a collusive offer to Duraset. He said that DSI would
not contest the award of the 15% to Duraset, by offering lower prices to
Sasol, if Duraset would not bid on a forthcoming Xstrata tender.
Henson says his offer was a bluff as he never intended to pursue the
lost 15%.
35]Hannes Bornman of Duraset never says what his response was to this
proposal. Henson says that Bornman agreed to the proposal, but that
Duraset nevertheless did not honour the undertaking and tendered for
the Xstrata work, but ultimately the game of deception did not pay off
for either of the schemers – Xstrata did not award a tender.17
36]Bornman says Duraset tendered for the Xstrata contract at what
Bornman terms his normal price.18 Less clear is whether this was
Duraset quoting a cover price or reneging on the agreement. In any
event Xstrata did not award the tender, although Henson admits it
made ad hoc purchases from DSI.19
37]DSI argues that the collusion related to the Xstrata contract and that as
this took place in 2005, it has prescribed.
38]However the analysis needs to be taken further than this. Firstly, the
question is what the collusion related to. If DSI would, but for the quid
16 Bornman witness statement, record page 144 paragraph 32.
17 See DSI chronology statement witness statement file page 216(17).
18 Transcript 712.
19 Henson transcript page 974.
10

pro quo of Duraset standing back from the Xstrata contract, tendered a
lower bid than Duraset to retain the 15%, then the arrangement has
had an anticompetitive effect on Sasol. We do not know the answer to
this. Henson, the only person who can tell us, suggests he was bluffing
with Duraset and never intended to go lower to get the 15%. Bornman
does not take the matter further and no witness from Sasol was called;
besides them it seems no one else could. Although, as we discuss
more fully later, respondents bear the onus to prove that a practice has
ceased, Henson’s evidence on this aspect was not challenged by the
Commission and has to be accepted.
39]From the Xstrata side, the question is whether it received genuine
tenders from both firms and if it did, why it did not award the tender.
We do not have answers to these questions either, nor any admission
from Bornman that his firm’s bid to Xstrata was a cover bid. Nor was a
witness from Xstrata called. Since the tender was not awarded in any
event, the next question is whether the collusion had any effect on the
final prices Xstrata reached with those it made the ad hoc purchases
with. We have no evidence on this point. 20
40]Thus we do not have evidence to suggest that the subsequent ad hoc
supply to Xstrata by DSI, and the price for the 15% of the Sasol
business by Duraset, were themselves the product of the earlier
collusion between DSI and Duraset. Although the agreement was of a
collusive nature i.e. for DSI to desist from contesting the Sasol 15%
and for Duraset in turn to hang back on Xstrata, there is no evidence it
had effects that subsisted beyond the cut-off date.
41]For this reason, we find that the collusive agreement reached in
respect of Xstrata and Sasol in 2005, although unlawful, was
concluded more than three years before the complaint was initiated
and is subject to the limitation on bringing this action in terms of section
67(1).

and is subject to the limitation on bringing this action in terms of section
67(1).
20 This is the key difference between the Sasol/Xstrata episode and that of Anglo Platinum that we
deal with below.
11

Goldfields
42]In 2005 Goldfields put out a reverse auction tender for the supply of
roof bolts in lots. At that time Goldfields was being supplied by DSI,
RSC and Videx. These three firms met to discuss the bid. Their
concern was that Duraset, which at that stage was not supplying
Goldfields, was going to bid, as according to Moshe Josef, it was
engaged in an aggressive pricing strategy. 21 Henderson ascribes the
concerns to Duraset’s aggressive pricing to Sasol to win its business.
Prior to the tender the three firms met to thwart Duraset by agreeing to
tender so low that Duraset would not win a single lot. Henderson says
they quoted below cost pricing.22
43]As a result Henderson states that Duraset did not win any business at
Goldfields.23 Josef suggests that Duraset had already got work from
Goldfields, but the strategy worked for the three “...to win some of the
Goldfields business away from Duraset.”24
44]Clearly the act of collusion to punish Duraset was perpetrated in 2005.
That act was unlawful but the agreement was made before the cut-off
date.
45]The question then is whether the effects of that collusive practice have
ceased. Although the evidence on this aspect was not developed
further, we can assume that this was a classic cartel punishment
strategy. The agreement was for each of the incumbents to tender
sufficiently low prices to ensure that Duraset did not win any new
business.
46]Absent another tender after the cut-off date, where it can be shown that
Duraset now complied with a cartel agreement on another tender, we
21 Josef affidavit, Videx answering affidavit, page 88, paragraph5.5.9.
22 Henderson witness statement paragraph 20, record page 131.
23 Henderson witness statement paragraph 21, record page 131.
24 Josef ibid, paragraph 5.5.510.
12

cannot find that this act of collusion continued beyond the time it
happened in 2005. It’s possible relevance to Anglo Coal we discuss
later. However had the Commission pursued a single ongoing cartel
theory, as we discuss in the postscript below this event would have
been more consistent with such an explanation, than the set of
intermittent conspiracies advanced by DSI and Videx. The punishment
strategy appears to be undertaken to enforce a previously agreed to
and adhered to market division.
Later Goldfield’s collusion
47]During the course of oral testimony it emerged that Videx having won
the Goldfield’s business at an unattractive price, sub-contracted this
work to a firm called Mandirk. Mandirk, about which much was said
during the hearing, was a subsidiary of DSI at the time, a BEE
company which had been established at the behest of Anglo Coal.
Mandirk was making so little from this sub-contract that it gave notice
of termination to Videx. Videx in turn gave notice of termination to
Goldfields. Goldfields put the work out for tender (it concerned a
standard roof bolt product known as a shepherd’s crook) and the
tender was won by Mandirk.
48]The Commission’s case did not deal with this latter event of an
arrangement between Videx and Mandirk. It is not clear why Mandirk
took over a subcontract on behalf of Videx, which it appears was kept
concealed from Goldfields. Le Roux was less than convincing when
asked about this. He said he could not recall. However he confirmed
that DSI had delivered the products to Videx who had then delivered
them to Goldfields.25
49]This episode is not adequately explained by either Henson or Le Roux.
Why would the one firm bid for an uneconomic tender then sub-
contract it to another, seemingly without the knowledge of the
customer. Again this might have been another collusive strategy to
25 See transcript pages 1608 -9.
13

punish Duraset by driving prices down. However, absent further
evidence from the Commission on this point they have not established
a collusive agreement which the two respondents might be obliged to
rebut.
50]Thus even this more recent Goldfield’s evidence does not prove
collusion. What emerged in evidence as well was an attempt by
Henson to collude with Duraset’s parent, Aveng, to ensure that another
Aveng company, Steeldale did not bid for the contract Mandirk was
contending for. This however is not part of the case before us and the
only evidence we have is from Henson who says he did this on behalf
of Mandirk – who are not a respondent in this case.
Harmony Gold
51]In 2005, Harmony also put out a tender. At that time according to
Henderson it was supplied mainly by Videx, with RSC and DSI doing a
smaller amount of business with it.
52]The three firms met to discuss the tender. All agreed that they would
tender in such a way as to retain their respective existing business with
Harmony.26
53]But again double crossing occurred. This time the perpetrator was
RSC. Koszewski and Cawood decided to compete for the contract and
won it. However Videx was to have the last laugh. RSC was advised on
technical grounds that it would no longer be awarded the tender and
the business was awarded to Videx.
54]Le Roux for Videx suggests it regained the business “...nearly at cost
price...” as he says it was crucial for Videx to retain the critical mass
this customer gave it. The implication is that the contract was regained
26 Henderson witness statement paragraph 25. See also the testimony of Koszewski, who supports this
(see transcript page 251).
14

at a lower price than before. 27 Although one may be sceptical about
why Videx, if it was now the only contender for this contract, could not
obtain a higher price, the explanation that loss of a significant customer
may have threatened its economies of scale and hence it had to offer a
lower price than perhaps previously, is reasonably possibly true.
55]Certainly the agreement to collude between the firms was unlawful, but
it was concluded on a date prior to the cut-off date. Pursuant to that
agreement breaking down, due to RSC cheating to win the bid, and
then immediately losing the contract on technical grounds, the chain of
causation between the unlawful agreement and the final price at which
Videx, who were awarded the business, but not at its prior tender price,
but at a lower price, has been broken. Le Roux’s evidence, the effect of
which was to de-link the final price at which it obtained the re-awarded
business, from the prior agreement price, was not challenged by the
Commission, nor was any evidence from Harmony led to suggest the
contrary. Videx’s version on this aspect is the only evidence we have
and has to be accepted.
56]Again we conclude that there is no evidence that this collusive act
extended beyond the cut-off date.
Market division agreements
57]Although both Videx and DSI admit attending meetings at which market
division was discussed amongst the four respondents they deny that
any agreement was reached. The attempts therefore occurred before
the cut-off date and there were no such discussions after that date.
Although the Commission attempted to get this evidence out of
Henderson and Koszewski neither could provide any specific
recollection of meetings that post-dated the cut-off date. For this
reason we accept the Videx and DSI version that the market division
agreements were unsuccessful and pre-dated the cut-off date.
27 See comments on Exhibit 12, page 5.
15

Part 2
Anglo Coal
58]Allen Koszewski of RSC, the key witness for the Commission, testified
that in 2006 he invited all four respondents to a meeting to rig a tender
that had been put out by Anglo Coal. (We will follow the convention of
everyone at the hearing and refer to this from now on as the Anglo
Coal meeting.)
59]What is alleged to have been agreed at this meeting, and its aftermath,
became the major focus of the hearing. The reason for this is that
Koszewski places the date of the meeting after the cut-off date and
further alleged that subsequent to the meeting all four respondents co-
operated on other tenders. If Koszewski’s evidence was accepted it
would mean that Videx and DSI had been involved in collusive activity
that would not be subject to prescription because it post-dated the cut-
off date.
60]As a consequence there was much dispute about the date of the
meeting, whether there were subsequent agreements or
understandings that followed that meeting, as alleged by Koszewski,
and further in the case of DSI, whether Henson who attended that
meeting, was wearing his DSI hat or his Mandirk hat.28
61]Further dispute arose over whether the Commission had properly
pleaded this meeting in its referral in respect of Videx and DSI.
62]The two respondents allege that the case made out against them in
respect of Anglo Coal and its subsequent consequences, has either
prescribed, or not been proven, and if none of the above, has not been
fairly pleaded as a case against them.
28 Henson, a director of both companies, testified that only Mandirk was likely to get business from
Anglo Coal which wanted to deal with an empowerment firm. However when asked whether any of the
other firms were aware he was there representing Mandirk, not DSI, at this meeting, he conceded that
they would not have. (See transcript, page 1016).
16

63]Koszewski alleged that RSC embarked on a carefully thought out
strategy to get the four respondents into a properly working cartel over
tenders. Koszewski described how when he joined RSC in 2005 it was
in serious trouble. It had lost out on the Sasol contract of which
previously it had 100%, almost lost its key customer Anglo Coal to
Duraset and had only re-secured this work by agreeing to a
disadvantageous pricing regime.
64]Koszewski testified that RSC decided that the only way to get back to
sustainable margins was to end the price war and re-establish the
cartel. Given that in late 2005 trust had broken down between the four
firms, trust had to be rebuilt. His strategy was to call a meeting with the
other respondents. At the meeting he announced that RSC was going
to give notice of termination of its contract with Anglo Coal, relying on a
hardship clause. 29 He anticipated that Anglo Coal would put the
contract out for tender again and invite all the others to tender. He
asked the others not to tender against RSC which he said was going to
try and get back its margins by tendering for the work back but at
higher prices. 30
65]He said RSC asked the other firms to respect its pricing and to submit
cover bids above this price or not bid at all. Anglo Coal was RSC’s
major customer and if it lost its work, it would have been catastrophic. 31
By demonstrating that it was willing to expose itself to considerable
risk, RSC hoped to build up trust amongst the others. As a quid pro
quo, RSC would then back the other cartel members in respect of their
pricing on tenders.32 In that way the firms would regain the margins that
29 Four months notice of termination was required in terms of the contract.
30 He refers to this as a 30% material contribution giving an effective earnings before interest and
taxes (EBIT) of 8%.By the term ‘material contribution’ we understand from his evidence that if a

product cost R70 for the inputs and was sold at R100 the material contribution was 30%.
31 In a business plan discovered by Murray and Roberts the following remark is recorded in respect of
RSC: “All Anglo Contracts have been won back and contributed well to this year’s result. RSC has
recently been chosen as one of Anglo’s suppliers of the year.”See Record Bundle C page 511.
32 In his witness statement Koszewski suggests that the benefit would also accrue to non-contract
customers as prices would generally increase in the market. See witness statement file, page 137,
paragraph 12.
17

they had before the price war. He testified that the others accepted this
proposal at the meeting.
66]Videx and DSI accept that they were invited to the meeting and that
Koszewski had proposed rigging the Anglo Coal tender. Videx disputed
agreeing to the proposal. DSI states that Henson attended, but that in
doing so he was wearing his Mandirk hat, and also does not accept
that it agreed to the proposal.
67] It is common cause that Anglo Coal re-tendered in response to RSC’s
cancellation and that RSC won the tender again, securing higher
prices. It is by no means clear if Videx or DSI tendered at all for this
contract, let alone submitted cover pricing. The Commission did not
produce any tender documents from other competitors nor was anyone
from Anglo Coal called to testify.
68]As we stated earlier, one of the issues in dispute is whether this
evidence could be led against these two remaining respondents on
grounds of procedural fairness. If this defence is good, we do not need
to go into the other factual disputes that arose.
69]In its complaint referral the Commission alleged in respect of this
meeting that:
“During May 2006, RSC and Duraset also discussed the supply
to Anglo Coal of z-bar resin bolts. At that meeting, RSC and
Duraset discussed prices at which they were going to bid once
Anglo Coal had issued the tender. In particular it was agreed
that they will not go in with low prices thereby undercutting each
other.”33
70]Note these allegations are only made against RSC and Duraset, not
DSI or Videx. Although Videx wrote a letter to the Commission
33 Complaint referral, paragraphs 61-62, record page 23.
18

requesting further particulars, it did not ask any in respect of these
paragraphs although it did in respect of others. 34 Presumably it would
have, had the firm been mentioned in these paragraphs. The
Commission in any event declined to give any further particularity.35
71] Not surprisingly, DSI and Videx did not take issue with this meeting in
their answering affidavits, since they assumed, the meeting did not
concern the case against them. Thus, DSI in its answer notes the
content of these paragraphs and says nothing more. 36 Videx does the
same thing, but adds, “... Videx was not a party to any collusive activity
in respect of this tender.” 37
72]The Commission did not file a reply, so by close of pleadings the two
respondents could reasonably have assumed that they were not being
implicated by this meeting. After the close of pleadings witness
statements were then filed, including the statements of Koszewski,
Henderson and Bornman, all of which discuss the Anglo Coal meeting.
73]In Koszewski’s witness statement he elaborates on the Anglo Coal
meeting. His statement is at variance with the facts in the referral in
that he locates the meeting in February 2006, (the referral placed it in
May 2006) and then, significantly, he implicates Videx and DSI in
various respects. First, he alleges that all four respondents would
participate in the new Anglo Coal tender by providing agreed prices
above those of RSC on the clear understanding that RSC would be
awarded the contract.38 He then states that this was on the clear
understanding that the benefit to the other respondents was “...that
they would roll out similar prices to non-contract customers and price
increases in the market were co-ordinated and agreed upon among the
34 See Bundle C, pages 721-730.
35 See fourth respondent’s replying affidavit in amendment application, annexure AJ1, being a letter

from the Commission to Videx’s attorneys, dated 17 December 2009.
36 DSI answering affidavit, paragraph 51, page 62.
37 Videx answering affidavit, paragraph 7.3.7, page 106.
38 See Koszewski witness statement paragraph 11.
19

respondents.” 39
74]Then crucially for this case and the issue of prescription, he states the
following which we set out in full:
“ After it was established that the first respondent ( RSC)
managed to achieve reasonable rates in respect of the Anglo
Coal contract, the other respondents attempted to follow the
same route, in respect of their own contracts by serving the
requisite termination notices, re-tendering for such contracts
and the remainder of the respondents provided cover quotations
which resulted in each of the respondents retaining their
contracts but (sic) obtained reasonable rates i.e. rates higher
than those which they were receiving prior to terminating the
contracts.”40
75]Upon receiving the witness statements and before filing its own,
Videx’s attorneys again requested particulars from the Commission,
inter alia, suggesting that some events in the referral could not be
found in the witness statements and vice versa. 41 They sought clarity
on certain points. Amongst the issues on which clarity was sought was
the paragraph in Koszewski’s witness statement quoted above.
Specifically they asked for details as to the contracts he refers to. Note
Koszewski does not indicate which respondent and which customer he
is referring to – the allegation is wholly lacking in particularity.
76]The Commission wrote back declining to do so stating that these were
matters for evidence at trial. 42
77]At the commencement of the hearing counsel for Videx again signalled
39 Koszewski witness statement ibid, paragraph 12.
40 Koszewski witness statement ibid, paragraph 13.
41 The letter dated 19 July 2011, is exhibit 14.
42 See fourth respondents replying affidavit in amendment application, annexure AJ2, being a letter
from the Commission to Videx’s attorneys, dated 30 August 2011.
20

an objection, but did not pursue it at that stage although he indicated
he might do so at the end of the case. The Commission did not
respond to this criticism by an amendment.
78]During closing argument the Commission indicated for the first time
that it was considering filing an amendment. However it was only after
closing argument was concluded by all parties that the amendment
was tendered. The respondents both objected, and raised what they
said were preliminary objections as they had only just received the
amendment. We directed that the Commission file a formal application
for amendment and that it deal with the objections raised in oral
argument by the respondents, as well as explain the lateness of the
application.
79]This was duly done and the respondents both filed opposing papers.
We indicated that unless we were inclined to grant the amendment we
would not need to hear oral argument on this issue.
80]The amendment provides for the following paragraphs to be added to
paragraph 62, to be inserted as paragraphs 62.1 to 62.8.
“62.1 The meetings to discuss the Anglo Coal contract were
initiated by RSC. They were attended by all the respondents.”
62.2 The purpose of these meetings was for all the respondents
to agree to collude and assist RSC to increase its margins at
Anglo Coal.”
62.3 During the section 49A proceedings, Nigel Henson, of DSI,
informed the Commission that at these meetings, it was agreed
inter alia, that DSI would maintain its portion of the Anglo Coal
business and that in respect of the balance of the business, it
was sorted out among the respondents, which was understood
to be RSC and Duraset. DSI was at that stage, responsible for
Kriel Collieries.”
21

62.4 “In addition, I must mention that Moshe Josef of Videx,
during the section 49A proceedings, informed the Commission
that there was a number of meetings which were held in 2006,
regarding the Anglo Coal contract.”
62.5 “Videx informed the parties that it was not going to bid. It
seems however, that Videx eventually put in a token bid, while it
was not expecting and was well aware that it was not going to
be awarded the contract.”
62.6 “In respect of Duraset, it took a view that it was not going to
assist RSC to get excessive prices and, it was also not going to
assist Anglo Coal erode the market value as it had previously
done in respect of their earlier tender.”
62.7 “Based on the agreement which RSC had reached with all
the respondents, it held negotiations with Anglo Coal, which
culminated in the contract being terminated. The remainder of
the respondents honoured the agreement and RSC was not
attacked in the intervening period between the notice of
termination and the re-awarding and/or renewal of the contract.”
62.8 “The parties achieved their objective in that RSC regained
the contract at margins which were higher than at the time when
it had been undercut by Duraset, previously.”
Can the Commission lead evidence on matters not covered by the
referral?
81]At the time this matter was argued the leading case on this issue was
the Supreme Court of Appeal (‘SCA’) decision in Senwes. There, the
SCA held that the Tribunal was a creature of statute and that “... its
hearings are subject to the overriding limitation that the hearing must
22

be confined to matters set out in the referral.” 43 That decision has since
been overturned by the Constitutional Court which has held that the
SCA had conflated matters of jurisdiction and procedure. The Court
went on to hold:
“...the construction given to section 52(1) of the Act by the
Supreme Court of Appeal is at odds with the scheme of the Act,
including the structure of section 52, when read in its entirety.
This section gives the Tribunal freedom to adopt any form it
considers proper for a particular hearing, which may be informal
or formal. Most importantly, it also authorises the Tribunal to
adopt an inquisitorial approach to a hearing. Confining a hearing
to matters raised in a referral would undermine an inquisitorial
enquiry.”44
82]In Senwes the Commission had not sought to amend its referral, but
sought to rely on evidence of an alleged margin squeeze a proposition
that was not contained in the referral. Here of course the Commission
seeks to amend the referral, although it has only done so at the close
of the case. Given how late the referral has come – after all the
evidence has been led and final argument concluded – the
respondents are no better off than if it had not been made at all.
83]Although the Commission argued that an amendment could be made
at the eleventh hour, this one occurred at the stroke of midnight. But
even if, theoretically, one could accept an amendment at such a late
hour in the proceedings, there must be proper justification for doing so.
The Commission offers scant justification for its lateness.
84]It explained that it had made an assumption that the referral would be
read in conjunction with its witness statements as well as the ‘section
49A’ proceedings.
43 Senwes Ltd v Competition Commission [2011] 1 CPLR 1 (SCA) at paragraph 52.
44 Competition Commission and Senwes Limited Case CCT 61/11 [2012] ZACC 6, Paragraph 50.
23

85]We need to briefly explain what this refers to. After it had initiated the
complaint, but prior to the date of the referral, the Commission
exercised its powers under the Act to summons two of the
respondent’s representatives to an interrogation at its offices. This
power is exercised in terms of section 49A of the Act hence the
reference to section 49A proceedings. 45 On 4 May 2009 it interrogated
Henson of DSI. On 25 May 2009 it interrogated Moshe Josef, the
Managing Director of Videx Wire Products. Transcripts of these
proceedings form part of our record.46
86]The interrogation consisted of a series of questions to the respective
witnesses from Commission staff, as well as interjections and
comments by the legal representatives of the two firms. During the
course of both interrogations reference was made by the Commission
investigators to the Anglo Coal meeting and the two representatives
gave their account of the meetings. This is what the Commission relies
on when it says that it understood these proceedings to be
incorporated into the referral.
87]However there is no reference in the complaint referral to the section
49A proceedings or that any reliance was to be placed on them. The
49A proceedings are no more than a transcript of an interrogation of
witnesses. This is not a document capable of being relied on to
supplement a referral. It is in many parts incoherent and contradictory.
Sometimes the witnesses support what the Commission seeks to rely
on, at times they contradict it. It cannot serve this purpose and it is
indeed surprising that such a contention is even made.
88]We find no justification has been made out for why the amendment
was made so late and find that its late submission is procedurally unfair
and is accordingly refused.
45 In terms of this section the Commission may summons for interrogation any person believed to be

able to furnish any information on the subject of an investigation.
46 See bundle C2. For Josef, pages 349 to 394. For Henson, pages 411 to 460.
24

89]Even though we have refused the amendment, there is still a question
of whether the Commission is entitled to rely on evidence adduced at
the hearing and in the witness statements to make its case against
these two respondents in respect of the Anglo Coal meeting and its
alleged consequences.
90]As a matter of law based on the Constitutional Court decision in
Senwes this is possible. The Court there observed that “Senwes was
afforded adequate opportunity to deal with those matters and raise
whatever defence it desired to advance.”
91]So the remaining question we have to answer is whether on the facts
of this case, Videx and DSI could have reasonably understood what
case was being made out against them in respect of Anglo Coal and
secondly, whether they had an adequate opportunity to deal with it.
92]If one looks at the question only from the vantage point of opportunity,
then the answer is that they were. As the record shows, both counsel
spent much time in cross- examining the Commission witnesses who
testified about this meeting. They also had the witness statements of
Koszewski, Henderson and Bornman in advance of the hearing, in
which all three dealt with the Anglo Coal meeting.
93]The real objection is that the case in respect of DSI and Videx was
never consistent and coherent through the mouths of these witnesses.
In Senwes the Commission’s witness statements advanced a coherent
theory of harm, albeit not one found in the referral. In this case, taking
only the Commission’s witnesses, the same cannot be said.
94]This case presents a perfect example of why this reliance on matters
not in the original referral can, in certain circumstances, be unfair.
95]When Videx and DSI read the complaint referral they were entitled to
assume that they were not implicated in a contravention of the Act in
25

relation to the Anglo Coal meeting and events subsequent to that.
96]In this case, unlike in Senwes, it is not so much the lack of mention in
the referral that creates the unfairness; it is the fact that Anglo Coal
was mentioned as a meeting on which the Commission wished to rely,
where only Duraset and RSC, but not DSI and Videx, received express
mention. More significant is the fact that at the time of the referral the
Commission knew that DSI and Videx representatives had attended
the meeting. This after all had come up in the earlier section 49A
interrogations which we discussed earlier. During these interrogations,
both Josef and Henson had been asked expressly about this meeting
and they proffered an explanation. We don’t have to decide whether
these explanations were credible. The point is that fully aware of this,
the Commission chose not to allege that they were implicated by the
Anglo Coal meeting when it framed the referral. (Indeed during our
hearing the Commission spent much time cross examining Henson and
Le Roux about what was said during the interrogations. If it became so
central to the Commission’s case at the time of the hearing, then why
was it not earlier, since when it drafted the referral it had this
information.)
97]Videx and DSI at this stage - the stage of pleading - were entitled to
believe that despite their presence at the meeting, the Commission
knowing of this, had decided not to charge them with it. This is
consistent with how they framed their answering affidavits as we noted
earlier. The Commission did not cast any doubt on this in reply – it did
not file one. Nor were Videx’s two letters to the Commission the cause
of any new consideration on this point.
98]The next event in the sequence was the filing of the Commission’s
witness statements. Even at this stage a rethink might have been
defensible as the respondents would have had an adequate

defensible as the respondents would have had an adequate
opportunity to react. But the witness statements did not advance a
consistent thesis. Koszewski and Henderson, arguably sing from the
26

same song sheet in alleging that further collusion followed the Anglo
Coal meeting. Yet, even so, they do not between them advance a
coherent factual case. On Henderson’s version, which is the more
detailed one, post the Anglo Coal meeting, the respondents agreed on
a ‘price role out’ agreement. They were to cover each other on other
tenders such as Sasol and Lonmin, and in respect of non-tender work
to agree not to undercut one another. 47 Henderson does not link a
specific respondent to each of these contracts. He refers in general
terms to all the respondents.
99]Koszewski states that after it was evident that RSC had succeeded in
gaining reasonable rates in respect of the Anglo Coal contract, the
other respondents followed suit, and attempted to get higher prices on
their tenders by serving the requisite notice of cancellation, re-
tendering for them and obtaining higher prices because the other
respondents provided covering bids.48 Koszewski does not mention
which tenders this relates to nor does he specify which respondent did
what. They are all referred to in general terms. Unlike Henderson he
makes no reference to Sasol and Lonmin contracts or to collusion in
respect of non-tender agreements. For his part, Henderson does not
refer to the mechanism of cancelling and re-tendering which is
Koszewski’s point of emphasis.
100]Just one aspect of the inconsistency between these statements is
worth emphasising to illustrate the concern of having an imprecise
case following an absence a pleaded case on this point. Henderson
refers to Sasol and Lonmin as examples. Is Henderson confusing
events that precede the Anglo Coal meeting, as we know that collusive
acts in respect of Sasol and Lonmin took place in 2005 not 2006 when
the Anglo Coal meeting took place or is he referring to a subsequent
event in 2006? Given that the respondents rely on prescription to meet

event in 2006? Given that the respondents rely on prescription to meet
this charge, if it was not specified in a pleading nor more clearly set out
47 See Henderson witness statement record page 133, paragraph 35.
48 See Koszewski witness statement, record page 137, paragraph 13.
27

in the witness statements, how do they know which defence to raise;
should it be prescription if it was confusion about the dates or an
admission or denial if it referred to some subsequent act of collusion
relating to those firms. Why does Koszewski not mention Lonmin and
Sasol in his witness statement, as acts of later mutual reciprocity, given
the centrality of such an allegation to the case being made?
101]The two Duraset witness statements from Smit and Bornman
confound the problem. Bornman refers to the meeting and to Duraset’s
attitude at the meeting. He makes no mention of the other two firms or
any subsequent quid pro quo . Smit of Duraset, who on everyone’s
version is present at the Anglo Coal meeting, makes no mention of it at
all in his statement. It’s not clear why, as Smit was never called by the
Commission.
102]The omission in the referral is now compounded by an inconsistent,
imprecise and incoherent version, viewed from the vantage point of the
four witness statements. Whilst after the Constitutional Court decision
in Senwes we know the Commission is not confined to the case it has
pleaded in its referral, where it seeks to rely on subsequent testimony,
written or oral, to make out an additional charge against a respondent
not found in the referral, or at variance with the referral, that must be
made reasonably clear to the respondent facing that charge, as early
as possible, so that it can fairly respond to it.
103]Again the issue of the confusion was raised by counsel for Videx at
the commencement of argument. Again the Commission refused to
clarify its position. Its witnesses were led and by the end of oral
testimony its case was no clearer. Indeed it was hard to understand
what reliance was being placed on Bornman who appeared to
exculpate the two respondents in his evidence of the meeting.
104]Whilst Koszewski and Henderson were good witnesses on the

104]Whilst Koszewski and Henderson were good witnesses on the
rationale for the meeting and the strategy adopted, they became very
28

hazy on any subsequent detail associated with the quid pro quo . It is
not necessary then to even consider the credibility of the evidence of
Henson and Le Roux in respect of this meeting. The case of the
Commission produced oral testimony inconsistent with the thesis
advanced in Koszewski’s witness statement and was wholly confusing
on the question of the conduct of the DSI and Videx representatives at
the meeting. What they did or said at the meeting, let alone what they
did afterwards, is an issue that Henderson and Koszewski grappled
with. But again without a case made out in advance in the referral
these deficiencies exacerbated the unfairness of the situation. If the
Commission knew these firms had attended the meeting, but did not
rely on this fact for the referral in respect of those firms, why had it later
changed its mind? On what did it subsequently rely to hold them liable,
which it did not rely on at the time of the referral? The respondents in
fairness were entitled to know.
105]Even the amendment, if we had allowed it, would not have cured the
confusion. It fails to allege the quid pro quo understanding post Anglo
Coal, despite the fact that this was the centre piece of Koszewski’ s
evidence that pulled these two respondents into collusive activity after
the cut-off date. Indeed if the referral was amended as sought it
presented an internal contradiction. In paragraph 62 – the original
pleading – Duraset is alleged to have agreed with RSC not to undercut
one another when Anglo Coal issued the new tender. The amendment
then adds in the following paragraph as 62.6 “ In respect of Duraset it
took the view that it was not going to assist RSC to get excessive
prices and it was also not going to assist Anglo Coal erode the market
value as it had previously done in the earlier tender.” “ These two
propositions seem inconsistent.
106]However we are not here to do an analysis of them. The point is that if

106]However we are not here to do an analysis of them. The point is that if
the respondents had the amendment at the time they came to cross-
examine witnesses, particularly Koszewski, they would have been able
to test which version was correct. Alternatively, this may have led to a
29

request for more particularity prior to the hearing. The reason
paragraph 62 suffers this apparent contradiction is that the
Commission was forced to patch up its case on this meeting post facto.
Bornman had destroyed their case on this point. Whether his evidence
on this aspect is truthful we do not know. But the respondents were at
least, ab initio, entitled to know the theory of harm advanced against
them from the outset. The case they met was a shifting target because
RSC and Duraset witnesses had given the Commission different
irreconcilable versions.
107]These differences are material not differences in nuance between
witnesses. The crucial aspect of Koszewski’s testimony is the post
Anglo Coal quid pro quo, more crucial given the prescription problems
the Commission was facing. Yet this aspect appears neither in the
referral nor in the amendment. This means that the respondents in the
course of the proceedings would reasonably have assumed they had to
deal with this aspect as they indeed attempted to – yet when the
amendment was produced it was not an allegation made out there.
This again demonstrates why the lack of the averments in the referral
or more timely amendment has made the Commission case difficult for
the respondents to fathom.
108]We find that it would be unfair to accept this evidence against the
respondents in respect of Anglo Coal and the events that followed it
because the respondents did not have a coherent case made out
against them which they could meet. Absent an allegation in the
referral and with inconsistent written and oral witness testimony
subsequently, the respondents prejudice was such that they could not
adequately defend themselves on this aspect of the case.
109]We make no finding against the respondents in relation to their
attendance at the Anglo Coal meeting in 2006 and whether they

attendance at the Anglo Coal meeting in 2006 and whether they
entered into collusive agreements or arrangements on any date
subsequent to that meeting, because this aspect of the case was not
30

proceeded with against them on a fair basis.
110]Given this finding, it is not necessary for us to decide a number of
issues raised by the Anglo Coal meeting including; whether the issue
has prescribed. 49, whether Henson represented Mandirk or DSI at the
meeting, whether Videx tendered a sham bid in response to the
request from RSC and whether, pursuant to the meeting, Videx, DSI or
both, gained a benefit or quid pro quo from RSC in return for
supporting them on the Anglo Coal bid and if so, in respect of what bid
or tender.
Part 3
Anglo Platinum tenders
111]In 2004, Anglo Platinum surprised the market by putting up the
contracts to supply it with roof bolts for tender by way of a reverse
auction. This process had not been used before. In a reverse auction,
suppliers bid to supply the company that holds the auction, with
products at a particular price. Instead of bidders who are buyers,
bidding the price up over time as with a conventional auction, in a
reverse auction, the bidders are sellers of a product, who bid one
another’s prices down, hence the name.
112]In this particular reverse auction the bid took place over the internet in
49 There remained confusion as to whether the Anglo Coal meeting had occurred prior to or after the
cut –off date. Correspondence from Anglo Coal introduced late in the hearing appeared to push the
probable date of the meeting to before the cut-off date. See Exhibit 7, a letter from RSC to Anglo Coal
which is dated 23 January 2006, ironically the cut-off date. This letter sets out the hardship claim and
refers to an earlier meeting with Anglo on 16 January 2006. This letter was not available when
Koszewski testified, but on Koszewski’s evidence this letter would only have been written after RSC
had met with the other respondents and knew that it had their support. If this surmise is correct, then

the Anglo Coal meeting probably precedes the cut-off date in which case the quid pro quo evidence is
all the more central to what remained of the Commission’s case on this point. Notice of termination
appears to have been given on 1 March 2006 according to a subsequent letter from Anglo Coal to RSC
confirming that the contract would terminate on 1 June 2006. Thus the only possibility that the Anglo
Coal meeting might have taken place later than 23 January is if the hardship notice preceded the
meeting with the respondents and that meeting took place sometime between 23 January and 1 March
i.e. RSC was willing to risk the hardship letter, before getting the others on board, but not the
termination. We can’t be sure which is correct. Why RSC did not produce this correspondence earlier
is also unclear.
31

real time. Anglo Platinum was thus able to see each respective bid and
to see what was happening to prices as the auction proceeded.
113]Since the bidding process was complex, Anglo Platinum called in
foreign experts to help them run the auction. This included providing
training to the bidding firms, amongst them, the four respondents.
114]The four respondents felt very threatened by this process. In 2004
steel prices had gone up and those firms that had supplied Anglo
Platinum on pre-auction contracts found that their customer was
unwilling to allow them to pass on these increases or pass on the full
increase. Already resenting the fact that their margins had been eaten
into by Anglo Platinum’s attitude, they felt even more threatened by the
proposed reverse auction. The firms got together and decided to rig the
auction. The approach was straightforward. Each firm would attempt to
retain its existing business with Anglo Platinum in terms of volume, but
would try and increase prices so as to offset the margin squeeze.
115]The only way to ensure this would happen was if there was elaborate
planning by the firms to rig the bid. They produced a spread sheet
which each had during the bidding, indicating; which firm would bid for
a particular lot, which would open a bid and at what price, and then at
what price rivals would bid down. Cawood in his evidence described
the process in the most detail. Whilst the bidders were required to be in
telephonic contact during the bid with Anglo Platinum, its bidders were
also in constant telephonic contact with one another, unbeknown to the
latter, to ensure they were all following the same script. The result was
that the firm that was planned to win the bid would succeed in having
no-one bid below its price, whilst the higher prices, bid sequentially
lower by the others, made the auction appear genuine to Anglo
Platinum. The reality was that these higher bids were a sham in

Platinum. The reality was that these higher bids were a sham in
conformance with the pre-agreed strategy.
116]The bid rigging process worked. However, Anglo Platinum decided not
32

to award any of the bids; no doubt because the lowest tenders were
still made at higher prices than Anglo Platinum enjoyed on existing
contracts.
117]In 2005 sometime eight months to a year after the first reverse
auction, Anglo Platinum held a second reverse auction. History
repeated itself. The respondent firms again colluded to rig the bid to get
higher prices and protect their volumes. Again the bid rigging scheme
worked. Anglo Platinum again decided not to award any of the tenders.
Instead it negotiated with the individual firms.
118]According to Henderson, RSC succeeded in getting its original
contract terms honoured. This meant that both its volumes and prices
remained the same. It is less clear if this was the case for the other
firms. Bornman who was otherwise an unhelpful witness for the
Commission, was firm that the Anglo Platinum collusion was
successful. “There was only actual in. and that was with the Anglo
Platinum reverse internet auction that was the only time I can recall
that we fully co-operated and gave our word and exchanged prices and
went the whole thing” 50. In his witness statement Le Roux says Videx
had to reduce its prices to retain its market share because it was
discovered that Duraset had reduced its tender prices to get business
from others. He does not make it clear which price is being reduced –
the price submitted in the rigged tender or the pre-tender price. 51 (Note
that Videx did not cross examine Bornman on Anglo Platinum nor did it
put to him that post the second reverse auction, there was competition
in the individual negotiations around some products) DSI appears to
have retained prices and volumes. Cawood from RSC surmises that if
conditions had changed for any firm he would have known given the
industry grapevine.
119]Why did Anglo Platinum not bargain harder? Henderson suggests that
50 Transcript, page 763.
51 See Le Roux witness statement record page 174, paragraph 48.

50 Transcript, page 763.
51 See Le Roux witness statement record page 174, paragraph 48.
33

because of the failure of the two expensive reverse auctions the Anglo
Platinum people “...had a lot of mud on their faces...” and were relieved
to be able to get away with retaining the status quo. 52 Recall that under
both reverse auctions prices had not decreased as would have been
expected, but because of the bid rigging, had gone up. Small wonder
that it accepted with alacrity the crumbs offered it by the collusive
bidders.
120]It is common cause that the bid rigging agreements were entered into
in 2004 and again in 2005, and thus before the cut-off date. The
question as we explained earlier in this decision is whether the practice
continued after the cut-off date.
121]This involves first a factual question and secondly a legal question.
We deal with the factual question first.
122]It has not been disputed that the individual negotiations that followed
the abortive second reverse tender were still in operation as of the 26
January 2006. In its chronology statement DSI states that the next
occasion that Anglo Platinum held a tender was in 2009. According to
it, “... the effect of the contract that DSI had with Anglo Platinum could
be said to have ceased only then.” 53
123]Videx has not contradicted this evidence so we can safely assume
that it is correct.
124]The next question is whether these subsequent prices can be
regarded as collusive. More specifically are they the outcome of the bid
rigging agreements?
125]There is no evidence that after Anglo Platinum had rejected the
52 Transcript, page 453.
53 See Third respondents (DSI’s) narrative on effects of alleged collusive tendering. This is described
as a supplement to Henson’s witness statement. See witness file page 216(1). The passage quoted
comes from paragraph 17 of this statement, witness file page 216(10).
34

outcome of the second reverse auction that the respondents met again
on this aspect.
126]The evidence of Henderson, who was the only witness to give detailed
evidence on this point, was that the bid rigging had two objectives. The
first was to achieve higher prices. This objective failed because Anglo
Platinum did not accept the outcomes of the tender. The second was to
prevent the prices then in place from being eroded by virtue of the
reverse auction. On this Henderson is clear – the respondents
achieved this objective or what we will refer to as Plan B.
127]We see this from the following exchange with the Tribunal:
MS CARRIM: But you said earlier that the desired outcome was
achieved, what was the desired outcome then? Was it that you
wouldn’t lose the business or that prices would have been
driven down further?
MR HENDERSON: Prize A would have been to get the
increased prices. The next one was to get our business back at
the same prices.
MS CARRIM: Was that part of the plan?
MR HENDERSON: Yes.54
He is pressed on this point further in cross examination by DSI’s
counsel. His answer to the question if there was any point in just
keeping existing market share was “...second prize was better than
third prize.” 55
128]As became clear third prize was that the parties would have been
54 Transcript page 454.
55 Transcript page 454.
35

forced into a price war and that prices may have gone lower. 56 Indeed
Henderson had illustrated what this fear might be. He testified that
Duraset competed for a product called a long anchor against another
firm called M&J that was not a party to the collusive arrangement and
as he put it the “...prices went so low it was cut-throat.” 57
129]Henderson’s proposition that without collusion, prices would possibly
have been driven lower than they were in the existing contracts was
not challenged.58
130]DSI in cross-examination concedes this proposition. Counsel put it;
“So there is potential benefit, because the prices may have gone lower,
not necessarily, but they may have – that was the only benefit really as
it turned out.” Henderson confirms this.59
131]Videx, who cross-examined after DSI, did not challenge Henderson’s
version on this aspect.
132]Cawood in his witness statement states that Anglo Platinum had failed
to obtain the benefit of the lower prices they had anticipated. Thus he is
consistent with the testimony of Henderson on this aspect. Although he
could not comment on what the respondents had achieved in their
individual negotiation with Anglo Platinum he surmised that no
business changed hands as if it had, given the industry grapevine, he
would have got to know of this.60
133]Neither Henson nor Le Roux challenged this version.
134]In his witness statement Henson confirms that in the individual
negotiations DSI did not get any new business but nor did it concede
56 Transcript 455.
57 Transcript 451.
58 See exchange between Tribunal and Henderson transcript page 450-1.
59 Transcript, page 455.
60 Transcript, page 818.
36

any business to anyone else or raise it prices.61
135]During his testimony he conceded that DSI managed to maintain its
prices in the individual negotiations. 62
136]Although Videx in its answering affidavit admitted the collusion it
stated that it was forced to compete aggressively to retain its existing
business at lower prices. 63 However Le Roux, who was not the
deponent to the answering affidavit, admitted during testimony that the
firm had received huge benefits for Anglo Platinum as it had retained
its business.64 When it was put to him that Videx, like DSI, had
received a benefit from the collusion in that others did not destroy
prices, Le Roux confirmed this.65
137]Thus we have no evidence to contradict the version of Henderson on
this point. What Henderson is saying is that but for the agreement to rig
the bidding, the prices subsequently negotiated by the respondents,
albeit as a result of individual negotiations, would, like the prices of the
long anchors, have been much lower. Therefore the prices achieved
are a direct consequence of the bid rigging. Put another way, if the bid
rigging had not occurred, Anglo Platinum would have achieved lower
prices though its reverse auctions and the respondents would have had
to accept these prices and indeed, some may have lost their contracts
to rivals.
138]Thus the final prices, although ostensibly individually negotiated, are
the direct result of the collusive bid and inextricably bound up with
them. The correct counter-factual, if there had been no collusive bid,
would not have been these prices, but prices achieved in a competitive
reverse auction – prices that as a matter of probability would have
61 Henson witness statement, paragraph 9.5, page 190.
62 Transcript, page 1116.
63 See answering affidavit paragraph 7.3.4.2 at page 105.
64 Transcript, page 1531.
65 Transcript 1533.
37

been lower than those achieved in the individual negotiations.
139]The evidence further is that these prices subsisted post the cut-off
date. DSI has stated that there was no new tender from Anglo Platinum
until 2009.66 We know from both respondents that they sold roof bolts to
Anglo Platinum in the period after the cut off date because they have
given turnover figures up to that year. Given the evidence of the nature
of these contracts as evergreen contracts, there would have been
orders and purchases from Anglo Platinum pursuant to the individually
negotiated contracts that persisted after the cut–off date. The
respondents certainly did not suggest that no orders had been placed
on them after the cut-off date and if that was the case, the onus would
have been on them to establish this fact. 67
140]The legal question therefore is whether the negotiated prices, which
on the facts we know subsisted past the cut-off date, constituted, in
respect of DSI and Videx, a continuation of the prohibited practice of
collusive tendering.
141]DSI argues that collusive tendering is a once-off event. The practice is
the collusive tender and once the collusion has occurred it ceases. The
practice does not subsist for the period during which it has its effect.
On this argument the collusive tender took place sometime in 2004 and
then again in mid to late 2005, but thereafter it did not continue and
hence it ceased more than three years prior to the cut-off date.
66 See supplementary statement of Henson page 216(10) paragraph 17 where it is stated, “ The first
time that Anglo Platinum tendered again was in 2009. The effect of the contract that DSI had with
Anglo Platinum could be said to have ceased only then.” (Our emphasis).Henson goes on to state that
the prices achieved under the contract did not inflate as a result of the collusion.
67 See our decision in Pioneer 15/CR/Mar10, paragraph 86 where we stated “Moreover it is for a

67 See our decision in Pioneer 15/CR/Mar10, paragraph 86 where we stated “Moreover it is for a
party invoking prescription to allege and prove the date of inception of the period of prescription.
Hence Pioneer, if it wishes to rely on the provisions of s67(1) is required to allege and prove, on a
balance of probabilities that the conduct complained of by the Commission in its complaint of referral
of 2007 ceased three years before this date. Such an approach to section 67(1) is entirely appropriate
in the context of the secretive nature of cartel activity, where respondents engage in meetings held
behind closed doors, at restaurants, pubs and hotels, keeping virtually no paper trail and where proof
of these arrangements lie squarely and solely within the knowledge of co-conspirators.”
38

142]DSI concedes that the other practices referred to in section 4(1)(b),
price fixing and market division, may continue after the date of the
agreement that established them, but argued that collusive tendering
was different. It relies for this proposition on the fact that collusive
tendering is mentioned in a separate sub-paragraph in section 4(1)(b)
and hence this separate treatment is justified. 68
143]However it is hard to see why the fact that collusive tendering forms
part of a separate sub-paragraph in a sub-section dealing with the
species of so-called per se horizontal contraventions, justifies an
inference that it enjoys separate consideration for considering the
limitations section. The disparate architecture of section 4(1)(b) sub-
paragraphs is no indication of disparate legal consequences as a
matter of statutory interpretation. Rather it is an indication of the
different forms of conduct that constitute per se abuses. Given that
there is no defence of justification for 4(1)(b) offences the legislature
sought to enumerate clearly what those offences were. Thus price
fixing, market division and collusive tendering, receive separate sub-
paragraphs as a matter of elucidation, not to otherwise signify them for
separate treatment as to consequence. If they were one might expect
this to have been stated.
144]Nor is there any policy rationale for treating the consequences
differently. In price fixing and market allocation, as with the collusive
tender, an agreement may also be a moment in time. All three species
of per se horizontal practice under section 4(1)(b) should be treated in
same way. Collusive tendering produces the same outcome as
customer allocation (section 4(1)(b)(ii)). If DSI is correct about its
moment in time argument, enforcement action against bid rigging
would grind to a halt, because most of these practices operate covertly

would grind to a halt, because most of these practices operate covertly
and may only emerge more than three years after the agreement that
founded them had “ceased”. Yet we know from experience that the
68 Collusive tendering is mentioned separately to other per se offences and has its own sub paragraph
in 4(1)(b) (iii).
39

fruits of collusive tendering can persist well after the agreement that
founded them had occurred.
145]The implication of DSI’s argument is that if a customer calls for a
tender for a period exceeding three years – say 10 years – and the
tender is awarded to a firm as a result of a rigged bid, but is only
detected by the Commission three years and one day after the date of
the tender being accepted, no complaint can validly be initiated against
it, even though the tainted tender is still in operation through continual
purchases in terms of the tender contract, for seven years hence. This
cannot be correct. Further, given that the customer can only recover
damages from the bidders if there is a prior finding of a prohibited
practice by the Tribunal, civil claimants too would be without a
remedy.69 Nor, it seems, could the contract be voided on this ground
either.70
146]It is highly unlikely that the legislature would have intended such a
limited meaning to the phrase the “ practice has ceased ”. Quite clearly
the legislature contemplated the practice as having ceased when its
effects have ceased. 71 That interpretation is not only more consistent
with the language of section 67(1) but is a more sensible one as well.
The reason the limitation exists is to avoid the pointless prosecution of
practices that have ceased some time before the initiation of the
complaint. This consideration does not arise if their effects remain alive
and well at the time of initiation. Consider further the use of the term
practice had ceased. The choice of the term “ ceased” in preference to
a word that might have otherwise been used, like “occurred”, suggests
a practice that is ongoing or continuous in nature, and that has ended,
and not an act which occurred only in a moment in time.
69 See section 65(6) and 65(9) of the Act.
70 See section 65(1) which allows the Competition Tribunal or the Competition Appeal Court to

70 See section 65(1) which allows the Competition Tribunal or the Competition Appeal Court to
declare void a provision of an agreement but this must presuppose the jurisdiction to find that the
agreement involved prohibited practice which presupposes jurisdiction to hear the matter i.e that it was
not precluded from doing so by virtue of section 67(1).
71 According to Butterworths Dictionary of Legal Words and Phrases, the word cease “... implies the
discontinuance of something already in operation as in ‘the wicked cease from troubling’. ( Cradock’s
Estate v Cradock 1951(3) SA 64 (N)”).
40

147]In the United States, the Supreme Court held in the Zenith case that:
“In the context of a continuing conspiracy ....each time a plaintiff is
injured by an act of the defendants a cause of action accrues to him to
recover damages caused by that act and as to those damages, the
statute of limitations runs from the commission of the Act.”72
148] Areeda goes on to say that a private plaintiff therefore may bring a
treble damages action long after the inception of an antitrust
conspiracy, as long as it can prove that “...its damages were
proximately caused by an overt act occurring within the statutory time
period. The overt act could be a price-fixing conspirator’s elevated
price ...”73
149]In the United Kingdom case, a similar approach was adopted.
Although this again is a damages case the court held that even if the
unlawful activity started outside the limitation period, an action could be
brought for those acts within the limitation period. 74
150]It might be different if the tender was itself a once-off purchase, but
where the tender has set the price for subsequent purchases over a
period of time, all those subsequent purchases are tainted by the
prohibited practice of collusive tendering, because the prices have not
been obtained by competitive market conditions, but rather are the fruit
of the collusion, and in that sense, the practice of collusive tendering
must be conceived of not as a single moment in time, but one that has
an initial agreement to conspire, followed, if the relevant facts show
this, by subsequent acts of execution, each time goods are purchased
pursuant to the tainted agreement. Even if the initial agreement
precedes the cut-off date, if the subsequent acts of execution have
72Zenith Radio Corp v Hazeltime Research, 401 US 321.
73 See Areeda paragraph 160 page 112. Relying on Hanover Shoe v United Shoe Mach Case 1968 at
502 n 15.

502 n 15.
74 Arkin v Borchard Lines Ltd (Preliminary issue)[2000] Eu LR 232 (Comm).This extract is from a
summary of the decision as quoted in Competition Litigation, UK Practice and Procedure, edited by
Mark Brealey and Nicholas Green, page 76-7.
41

effects that succeed it, the practice has not ‘ceased’ but is continuing
after the cut-off date and therefore is not barred in terms of section
67(1).Whether there are effects, and what constitutes ‘effects’, is a
matter for evidence in each case.
151]We know that the prices that prevailed after the cut-off period were not
based on those set in the collusive tender but came as a result of
subsequent individual negotiations. However Henderson’s evidence
was that the collusive bid had two aspects to it. Having not achieved
higher prices, the so-called Plan A, the respondents protected their
pre-existing volumes and prices from downward erosion, Plan B.
Without the collusive bidding they could not have done so. In that
sense the collusive bid continued to determine the prices arrived at in
the individual negotiations – without the bid rigging firms would have
been forced to accept lower prices as an outcome of the tender and the
tenders would have been accepted. Plan A might have failed the
collusive bidders but not Plan B. The customer wanted Plan C. The
respondents subverted Plan C because they destroyed two tender
processes and forced Anglo Platinum to agree to existing pricing and
allocations. The individual price agreements are therefore a product of
the outcome of the collusive bid.
152]The next issue is whether there were acts of execution pursuant to the
cut off date in terms of these contracts. We know from the evidence of
the contracts generally in this case that contracts were of an evergreen
nature on which essential pricing and supply quantities were set out
and then orders were made from time to time pursuant to these
contracts. The evidence is of continuing sales after the cut-off date by
both respondents. Indeed, DSI, in its narrative statement, goes to great
lengths to justify certain price changes that occurred in 2006 as being
occasioned by input cost increases and not further collusion.75

occasioned by input cost increases and not further collusion.75
153]Accordingly the prescription defence fails and since both respondents,
75 See narrative statement op cit, paragraph 15.
42

relied solely on this defence, they are liable for contravening section
4(1)(b)(iii) of the Act, in respect of the Anglo Platinum reverse tender in
2005.
Remedy
154]Given that we have only found a single contravention against the
respondents, in respect of the Anglo Platinum second reverse auction,
the affected turnover we take into account must be confined to this
tender. Each respondent has provided turnover evidence in this regard.
155]We have approached the setting of an administrative penalty in the
same manner as we did in our Aveng decision, i.e. a six step
approach.76 This approach states:
Step One: determination of the affected turnover in the relevant year
of assessment;
Step two : calculation of the ‘base amount’ being that proportion of
the relevant turnover relied upon expressed as a percentage of the
affected turnover obtained in step1;
Step three : where the contravention exceeds one year, multiplying
the amount obtained in step 2, by the duration of the contravention;
Step four: rounding off the figure obtained in step 3, if it exceeds the
cap provided for by section 59(2);
Step five : considering factors that might mitigate or aggravate the
amount reached in step 4, by way of a discount or premium expressed
as a percentage of that amount, which is either subtracted from or
added to it;
Step six: rounding off this amount if it exceeds the 10% total turnover
cap provided for in section 59(2). If it does, it must be adjusted
downwards so that it does not exceed the cap.
76 Competition Commission vs Aveng (Africa) Ltd and Others, Case No: 84/CR/Dec09. This followed
a earlier decision of the CAC in Southern Pipeline Contractors and Conrite Walls (Pty) Ltd vs The
Competition Commission, Case No: 105/CAC/Dec10 and was also used by the Tribunal in a more
recent case of The Competition Commission vs DPI Plastics (Pty) Ltd and Others, Case No:
15/CR/Feb09.
43

Step 1
DSI
156]DSI has provided turnover figures in respect of Anglo Platinum over a
three year period from 2004 to 2007 based on sales per quarter. In
heads of argument it suggested that the affected turnover be made up
of the last two quarters of 2004 and the first quarter of 2005. 77 Given
our finding on the facts, the last year of affected turnover would be
more accurately reflected by taking an average of the sales in 2005
and 2006. This is because the individual agreements would have been
implemented sometime late in 2005. An average for both years is
therefore the most appropriate. We have treated Videx in the same
way.
157]For DSI, this average would be R 9 334 858.00.78
158]Videx argues that notwithstanding this amount, none of its Anglo
Platinum sales in that period can be considered affected turnover.
There are two reasons for this. First in respect of certain products it
was the only supplier; hence the collusive tendering would have had no
bearing on the price. These products, set out in Exhibit 12, are lacing
bolts and combo and coupling roof bolts.
159]In relation to the remaining product, flexible eyebolts, Videx argues
that this turnover was also not tainted by the collusion, as it was bid
down to a competitive price, because it had to compete with another
supplier who was not party to the collusion. Hence the very low
margins it earned on this product as shown in Exhibit 12.
160]Thus whatever turnover it earned on Anglo Platinum was unaffected;
77 This added up to R 6 742 455. Taking a figure of 10% of that, DSI suggested in argument a penalty
of R 674 245.
78 Calculated as follows: (2005 turnover R7 620 490) + (2006 turnover R11 049 225) /2 = R9
334 858.
44

either earned as a result of an uncontested monopoly or as a result of
a competitive bid that fell outside of the bid rigging conspiracy.
161]Of course this begs the obvious question. Why did it bother to collude
at all? If it had no benefit from the collusive bidding as this argument
suggests, why risk such a strategy for no gain. If it was mistaken about
whether others would bid against it the first time round it would surely
have not been in its interests to go through the same exercise the
second time round, but it did.
162]Firms do not engage in gratuitous collusion. There is no warrant for
such a piecemeal approach to affected turnover. The bidding was
divided into lots and the products that Videx supplied were part of the
bid. The evidence is that the bid as a whole was rigged to ensure
higher prices and the resumption of the status quo. None of the
witnesses for the Commission was cross-examined by Videx to
suggest that these products were deserving of special exception. Were
these products even if solely supplied by Videx in the bid, ‘must- have’
products for the mine – could they have been substituted by another
product or in lesser quantities; but for the collusion would the other
firms have been able to source these products through supply side
production shifts or imports? These are issues that the likes of
Henderson, Koszewski, Bornman et al, might have been able to
comment on. They were not asked.
163]If this was Videx’s case then that was the moment for it to have done
so. Nor was the Commission alerted to this fact in Videx’s pleadings
which have a section on the level of profit it gained from the
contravention nor in its subsequent witness statements, nor in Josef’s
section 49A testimony. Videx’s criticism that Le Roux’s version was not
challenged under cross-examination whilst correct as an observation is
not a fair one. Fairness is not a one way street only applicable to

not a fair one. Fairness is not a one way street only applicable to
respondents and not to the Commission. It too is entitled, representing
the public as it does, to be treated fairly in presenting its case. If Videx
45

wished to raise such a defence it was obliged to do so timeously so the
Commission could put its version to its own witnesses for comment.
164] Secondly, the evidence of witnesses for the Commission and the
tender document indicates that although there were individual lots the
bids would also be examined holistically and that a firm whose package
was comprehensive across lots might be able to win.79 This alone
would make all the lots affected turnover.
165]Third, collusion is harmful because it allows the other parties to the
collusion to benefit from higher prices at the expense of the consumer.
Each firm that is party to an act of collusion, aids and abets its co-
conspirators to achieve that which they could not absent the collusion.
Even if Videx did not profit from the collusive bidding, which we do not
accept, it enabled the other three firms to do so. Its name appears
frequently on the pages of Exhibit 3 as the party submitting an opening
or closing bid.80 With Videx as part of the collusive conspiracy the other
respondents were free to raise their prices, confidently knowing it
would not be bidding against them. For that it must be liable to a
penalty and its turnover in respect of that tender serves as a legitimate
and proportional base to impose a penalty.
166]Finally, as we observed in Aveng, the concept of affected turnover is a
discretionary one. There is no hard and fast rule to approaching its
boundaries. As Bellamy and Child observe of the practice in European
Community law “ It has been held that the Commission is not obliged
to reach precise market definition for the purpose of setting a fine
under the 1998 Guidelines.”81
167]A similar approach is taken in the newly released United Kingdom
79 In Exhibit 3, the tender document the following is stated: “8) The ability to lower your own bid
without necessarily entering the lowest bid in the online auction increases your chances of winning

part of the business because a suppliers competitiveness across all lots will be taken into consideration
in award evaluation. ” Our emphasis.
80 See for example Exhibit 3 pages 5 to 18.
81 See Bellamy and Child, European Community Law of Competition, Sixth Edition, edited by P. Roth
and V. Rose, page 1289 paragraph 13.149.
46

Office of Fair Trading’s (O.F.T.) Guidance as to the appropriate
amount of a penalty .82 Referring to UK case law on this point the
Guidance document states:
“The OFT notes that the Court of Appeal in its judgment in the Toys
and Kits appeals stated that: ‘...neither at the stage of the OFT
investigation nor on appeal to the Tribunal, is a formal analysis of the
relevant product market necessary in order that regard can properly be
had to step 1 of the Guidance, in determining an appropriate penalty’
and that it was sufficient for the OFT to ‘be satisfied, on a reasonable
and properly reasoned basis, of what is the relevant product market
affected by the infringement.” 83
168]We find that Videx’s entire turnover for Anglo Platinum should be
included in the affected turnover. As we have been given figures over a
two year period we will take the average of the two annual amounts as
representing the turnover in the last year of the contravention. We used
monthly sales figures Videx provided, per product, in respect of its
sales to Anglo Platinum for the 2005-6 period.84
169]This is the same approach we took with DSI.
170]This amount would therefore be R24 068 196.00.85
Step 2
171]The approach to setting the penalty at this stage, following Aveng, is
to assess the infringement with respect to gravity and extent.
Contraventions of section 4(1) constitute per se contraventions and are
considered the most serious of the contraventions. Within the context
of section 4(1)(b), serious enough, collusive tendering is seen as the
82 OFT 423 dated September 2012. Available on www.oft.gov.uk
83 See footnote 18 of the Guidance, ibid.
84 See Exhibit 12 page 5.
85Annualised figures were calculated as follows: 2005 (R 801 403 + R 538, 868 + R 546 659) x 12 = R
22 643 160.00 and 2006 (R 1 085 445 + R 656 139 + R 382 852) x 12 = R 25 493 232. 00. Add 2005
and 2006 (R22 643 160 + R 25 493 232) / 2 = R 24 068 196.
47

most aggravating. Areeda and Hovenkamp in their treatise of United
States law observe:
“Bid rigging schemes are commonly thought more harmful than
ordinary price fixing because bid rigging is much easier for
cartel members to enforce. The general cartel must always be
concerned about surreptitious sales made at less than the cartel
price, stealing sales from other cartel members and thus
threatening cartel stability. In a bid rigging scheme, however,
the winning bidder is selected by the cartel and any cheating will
be detected immediately because the bid will be won by the
cheater rather than the designated winner. For this reason bid
rigging has been treated with somewhat greater hostility than
price fixing generally.”86
172]This approach would suggest that the percentage on which to
calculate the base amount should be closer to the 30% upper bound,
than we have relied on in past decisions. 87 Had the collusive tender
succeeded in its primary objective in achieving the bid prices we would
have done so. However, in this case given that the tender was rejected
by the customer, the gravity of the contravention is reduced slightly
from what it might otherwise have been.
86 Areeda and Hovenkamp, Antitrust Law, paragraph 2005b.
87 The upper bound of 30% is that adopted by the European Commission in its 2006 guideline. The
OFT 2012 Guidance now also uses 30% as an upper bound having previously used 10%. According to
the accompanying press release the change is justified because it: “... gives the OFT the ability to set
penalties which better reflect the gravity of different types of infringements, in particular for the most
serious breaches of competition law, such as hardcore cartel activity and serious abuses of a dominant
position. It brings the OFT in line with the approach of the European Commission and many European
competition authorities.”(See press release from OFT dated 10 September 2012)

competition authorities.”(See press release from OFT dated 10 September 2012)

This approach to using the 30% as an upper bound to the base calculation was adopted first by the CAC
in SPC and then applied by the Tribunal in two subsequent decisions, Aveng and DPI. In Aveng the
base amount was set at 15% for both respondents, and likewise in DPI, for three respondents. In SPC,
the CAC used 7% for one respondent and 20 % for another.
The OFT Guidance, provides for an additional step in a methodology that is otherwise similar to that in
the EU guidelines and suggested by the Tribunal in Aveng. This additional step is to provide for
‘specific deterrence and proportionality’. Mentioned as an example where an undertaking’s relevant
turnover might be too low and might need to be adjusted upwards, are bid rigging cases. See Guidance,
ibid, paragraph 2.18
48

173]We will also take into account, in considering the extent of the
contravention, that we can only make this finding based on a single
tender for a single customer. Previous section 4(1)(b) penalties have
involved collusion in national or regional markets for larger sets of
customers.
174]To sum up, we are discounting the base figure that might otherwise
have been applied to a collusive bidding cartel for two reasons; the
primary purpose was unsuccessful – the bid outcome was effectively
defensive in that it retained the existing status quo in respect of pricing
and quantity of supply and secondly, it is of a confined nature. However
the discount is limited because the conduct was still in essence bid
rigging, the most serious of the section 4(1)(b) contraventions, which
themselves are the most serious of the contraventions contained in the
Act, as we have held previously. For this reason we consider a figure
of 18 % is appropriate as a base figure.88
Step 3
175]Here we consider duration. Although the conduct might have
subsisted for a longer period after the cut-off date we do not have
evidence of how long that was. DSI, as we have seen, disclosed that
the next time that Anglo Platinum invited tenders was in 2009. This
would suggest that the duration may well have been three years.
However we have insufficient evidence about the amount of later
purchases post the 2006 figures we were given. We will limit the period
to one year in both the respondents favour.
Step 4
176]No rounding up is necessary so this step is not applicable.
88 The base amounts on these turnovers would be : DSI - turnover of R9 334 858 x
18% = R 1 680 274 .44 For Videx – turnover of R 24 068 196 x 18% =R 4 332 275
.28
49

Step 5
177]Both respondents addressed similar arguments in mitigation. The
market circumstances were such that the firms as suppliers of a
product with some, but little innovation was largely at the time of the
contravention a commodity. The respondents were placed between
powerful suppliers for the purchase of their steel input and powerful
buyers in the form of large mining houses. In the case of Anglo
Platinum, the evidence was that the mine had refused to pass on cost
increases or the full cost increase, thus cutting into the respondents’
margins.
178] Evidence of the margins earned on the products varied considerably,
depending on product type, as with Videx or time period, as with DSI. 89
Further, we do not have an acceptable counterfactual, available to us
at the time of hearing, as to what a proxy for margins or pricing would
be in a competitive market. We know from the general evidence that
the firms were concerned about being seen to excessively profiteer as
that would jeopardise the long term viability of all the firms.
179]Because we have found that the price in relation to the Anglo Platinum
tender was a defensive one – i.e. that protected existing prices which
may or may not have been set at a collusive level – we do not have
evidence on this – we will assume in favour of the respondents that the
prices concluded in the individual negotiations were lower than they
might have otherwise been had the original plan A prices been
accepted; and hence the corresponding benefit to them in the form of
profits and associated harm to customers Plan B prices, as opposed to
Plan A prices, contribute to mitigating the amount of the penalty.
89 See Exhibit 12, where the Videx margins vary between 4.8% and 18%, and the DSI statement,
which attempts to make sense of price increases in 2005. (See page 216(9) paragraph 15). In a
spreadsheet, DSI provided gross profit percentages for Anglo Platinum, for the period 2005 – 2006,

which varied, from a low of 13.3 % to a high of 29.4%. (See Record page 216(22)).
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180]To summarise; the probabilities are given that this was a Plan B price
and the fact that suppliers were positioned in between powerful
suppliers and powerful buyers that levels of profit were not substantially
more than they may have been in a competitive market environment.90
181]However, even if Anglo Platinum was a powerful buyer it was only
powerful if it had the ability to substitute suppliers with others. When
suppliers collude so effectively as we have seen in the defeat of the
two reverse tenders, the ability of the firm to assert a form of buying
power is constrained. A further issue for the buyer is that these
products were essential for the safety of the mining operations. There
was much evidence to suggest that mines were reluctant on safety
grounds to bring in new suppliers as its employees had faith in existing
products they were familiar with. This constrained a mine’s choice and
the respondents were fully aware of this. This, level of profit earned
factor, constitutes some, but a limited amount of mitigation.
182]We now consider the loss that might have been suffered by Anglo
Platinum. DSI devoted considerable attention to leading evidence to
suggest the lack of consequence of the prices of roof bolts in the price
of the final commodity produced by the mine. On this argument, in
respect of Anglo Platinum, the suggestion would be that the pricing of
roof bolts is such a minor part of the total costs of production it should
be treated as de minimis . Whilst there might be an argument to say
that the pricing of roof bolts has no probable effect on the pricing of
platinum, as individual producers may not be price makers in that
market, it is a dangerous path to travel to afford it too much mitigation.
Mines it is true face costs from multiple suppliers, but mines too have
to be profitable or they will close, with great consequences to a much
wider constituency than just their shareholders. For this reason mines

wider constituency than just their shareholders. For this reason mines
have to be stringent about cost cutting. Anglo Platinum would not have
engaged at some expense in payments to consultants and investment
of their own management time in two failed reverse auctions, if the
90 Input costs constituted up to 70-80% of the final price.
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costs of roof bolts were considered trivial parts of their overall
expenses.
183]Thus whilst this aspect of the argument is worthy of some mitigation it
is not as compelling as suggested by DSI.
184]Both firms claim an entitlement to recognition of the fact that they co-
operated with the Commission in respect of the investigation. Whilst
they attended the section 49A hearings this is because they were
legally obliged to. Nor did either assist the Commission in its case
against the other or it appears provide it with much more than it had
been provided already by RSC and Duraset. Most submissions were
exculpatory. There was nothing exceptional in the level of co-operation
offered, nor for that matter anything constituting aggravated conduct.
This aspect cannot be considered as aggravating or mitigating conduct.
185]There were also aggravating features of the respondents conduct.
Senior management were involved. For DSI, Henson was actively
involved and he is the company’s chief executive. Similarly for Videx
the active involvement of Le Roux, and both Josefs, the other directors,
shows that the firm was involved in the collusion at the highest level.91
186]The nature of the firms’ behaviour also constitutes serious
aggravation. The collusive bidding was fraudulent in nature in that it
amounted to a covert misrepresentation to the customer that it was an
open and fair bidding process when it was not. When Anglo Platinum
tried to repeat the exercise, the firms again colluded to frustrate its
purpose. Thus we are not dealing with a single incident in respect of
Anglo Platinum, but a repeated exercise by the respondents to defeat
its attempt to lower prices through a reverse tender. We also know that
Anglo Platinum did not go out on tender again until 2009.92
91 Koszeswki at 48.
92 See footnote 67.
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187]The collusion was not an isolated act. But for the limitation provisions
of the Act, the firms would have faced several other counts of collusion
which they have not disputed. Had this been an isolated act of
collusion this might have been a mitigating factor. But on facts that are
common cause we know the respondents were party to several other
collusive agreements and albeit unsuccessful attempts to divide the
market and did so over a period of several years. The behaviour of the
two firms against this context must be seen as an aggravating factor.
188]Indeed Videx in its submission to the Commission admitted that there
had been as many as 12 meetings between competitors in the period.
189]In the case of Videx it was still attending meetings with competitors,
albeit they did not succeed in their purpose, as late as February 2007,
according to evidence that was not disputed. 93 It was Duraset that
appears to have brought the attempts to further collude to an end;
certainly it did not come about through the actions of either of these
respondents, albeit they were the smaller two of the four firms
implicated in this case.
190]Overall the net aggravating factors are greater than the mitigating
factors. For this reason we have increased the base amount by 10%.
This increase would have been higher, but for the presence of some
mitigating features that we earlier identified.
Step 6
191]It is not necessary to vary the amounts as they do not exceed 10 % of
turnover in the preceding financial year.94
93 See witness statement of Bornman paragraph 40-41.
94 In DSI’s 2010 financial year, (year ending on 31 December), which was the last year audited
statements were provided to us, the group turnover is R 231 601 332 and the company turnover is R
255 236 604. In Videx’s 2010 financial year (year ending 28 February) the turnover was R
274 490 115.
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Conclusion
192]DSI is liable for contravening section 4(1)(b)(iii) of the Act and we
impose an administrative penalty on it of R 1 848 301 (One million
eight hundred and forty eight thousand three hundred and one rand).
Videx is liable for contravening section 4(1)(b)(iii) of the Act and we
impose an administrative penalty on it of R4 765 502 (Four million
seven hundred and sixty five thousand rand five hundred and two
rand).
Order
1. DSI is found to have contravened section 4(1)(b)(iii) of the Act for a
period of one year from 2005 to 2006.
2. DSI is ordered to pay an administrative penalty of R 1 848 301(One
million eight hundred and forty eight thousand, three hundred and one
rand) within three months of date of this order.
3. Videx is found to have contravened section 4(1)(b)(iii) of the Act for a
period of one year from 2005 to 2006.
4. Videx is ordered to pay an administrative penalty of R4 765 502 (Four
million seven hundred and sixty five thousand rand five hundred and
two rand) within three months of date of this order.
____________________ 19 September 2012
Norman Manoim DATE
Y Carrim and M Holden concurring.
Tribunal Researcher: Thabo Ngilande
For the Applicant: Adv T Motau SC and Adv N Mayet
instructed by the State Attorney
For the Third Respondent: Adv S.A Cilliers SC and Adv MJ Engelbrecht
instructed by Cliffe Dekker Hofmeyr
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For the Fourth Respondent: Adv JC Butler SC instructed by Nortons Inc.
55