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[2013] ZACT 44
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Competition Commission v Hosanna Medical & Disposables CC (016717) [2013] ZACT 44 (5 June 2013)
COMPETITION
TRIBUNAL
REPUBLIC OF SOUTH AFRICA
Case No: 016717
In the matter between:
The Competition Commission
..............................................................................................
Applicant
and
Hosanna Medical & Disposables CC
..............................................................................
Respondent
Panel: N Manoim (Presiding Member), M
Mazwai (Tribunal Member) and A Ndoni (Tribunal Member)
Heard on: 05 June 2013
Decided on: 05 June 2013
Order
The
Tribunal hereby confirms the order as agreed to and proposed by the
Competition Commission and the respondent, annexed hereto
marked “A”.
Presiding
Member
N
Manoim
Concurring:
M Mazwai and N Ndoni
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA
HELD IN PRETORIA
CT CASE NO. 016295
CC CASE NO. 2011NOV0370
In the matter between:
THE COMPETITION COMMISSION
...................................................................................
Applicant
and
HOSANNA MEDICAL & DISPOSABLES CC
.................................................................
Respondent
In re:
THE COMPETITION COMMISSION
...................................................................................
Applicant
and
SHEKINAH MEDICAL & DISPOSABLES CC
.................................................................
Respondent
HOSANNA MEDICAL & DISPOSABLES CC
.................................................................
Respondent
SETTLEMENT AGREEMENT BETWEEN THE
COMPETITION COMMISSION AND HOSANNA MEDICAL & DISPOSABLES CC
(“HOSANNA”) IN REGARD
TO ALLEGED CONTRAVENTION OF
SECTION
4(1)(b)(iii)
OF THE
COMPETITION ACT 89 OF 1998
, AS AMENDED.
The
Commission
and Hosanna hereby agree that application be made to the Tribunal for
the confirmation of this Settlement Agreement as an order
of the
Tribunal in terms of
section 49D
as read with
section 58(1
)(b) and
59(1 )(a) of the Act on the terms set out below.
1. DEFINITIONS
For the purposes of this Settlement
Agreement the following definitions
shall apply:
1.1. “
Act"
means the Competition Act, 1998 (Act No. 89 of 1998), as amended;
1.2.
“
Commission”
means the Competition Commission of South Africa, a statutory body
established in terms of section 19 of the Act, with its principal
place of business at Building C, Mulayo Building, the DTI Campus, 77
Meintjies Street, Sunnyside, Pretoria, South Africa;
1.3.
'Commissioner
means the Commissioner of the
Competition Commission appointed in terms of section 22 of the Act;
1.4.
“
Complaint
means the complaint lodged by the
National Treasury of South Africa (“the National Treasury”)
in terms of section 49B
of the Act under case number:2011NC)V0370.
The national Treasury is a government Department that is responsible
for,
inter atia,
the national budget, supporting
efficient and sustainable public financial management, and good
governance. The National Treasury
is governed by the Public Finance
Management Act (“PFMA”) 1 of 1999, and has its principal
place of business at 40
Church Square, Pretoria.
1.5.
“
Settlement Agreement”
means this settlement agreement duly
signed and concluded between the Commission and Hosanna;
1.6.
"
Hosanna
”
means Hosanna Medical &
Disposables CC, a close corporation duly registered and incorporated
in"terms1 ofthe Close Corporation
Act, 69 of 1984, with its main
place of business at 32 Muzafar Crescent, Azaadville, Krugersdorp,
Gauteng Province.
1.7.
"
Parties”
mean the Commission and Hosanna;
1.8.
"
Tribunal’
means the Competition Tribunal of
South Africa, a statutory body established in terms of section 26 of
the Act, with its principal
place of business at Building C, Mulayo
Building, the DTI . Campus, 77 Meintjies Street, Sunnyside, Pretoria,
South Africa.
1.9.
“
Respondents”
means all the firms that are cited as
the respondents in the Commission’s complaint referral filed
under Competition Tribunal
Case number: 016295 respectively, namely:
Shekinah Medical & Disposables CC and Hosanna Medical &
Disposables CC.
2. THE COMMISSION’S
INVESTIGATIONS AND FINDINGS
2.1. On 21 November 2011, the
Commission received a complaint from the National Treasury in terms
of which Shekinah and Hosanna
were alleged to have contravened
section 4(1)(b)(iii) of the Act, in that being competitors in the
market for the supply and delivery
of screening and confirmatory
rapid HIV test kits, they met to discuss prices and shared
commercially sensitive information relating
to the Tender
RT41-2011ME, being a tender which was advertised on the 10th of
December 2010 on behalf of the National Department
of Health
(“NDoH”).
2.2. The Commission investigated the
alleged conduct and found that in deed, the respondents had multiple
contacts with each other
regarding the tender as follows;
2.2.1. On or about November 2010,
Garson Naidoo (“Naidoo53) representing Hosanna held a meeting
with Shannon Abboy (“Abboy”),
representing Shekinah in
terms of which Naidoo requested an undertaking from Abboy that
Shekinah would supply Hosanna with HIV
test kits to fulfil the
requirements of the tender.
2.2.2. Abboy offered to assist Naidoo,
with the help of his Chinese-based supplier or agent, Grand Ocean, to
secure a supplier with
a different brand of products.
2.2.3.Subsequent
to this meeting but before the tender closing date, Abboy met with
Naidoo and they discussed the tender,
inter
alia
, in respect of promotion of
small business (section under SBD 6.2 of the tender documents), price
qualification and contract pnce
adjustment procedure, and specialist
functions contract management
2.2.4. Shekinah and Hosanna submitted
bids to the National Treasury which were similar in material
respects.
3. THE COMMISSION’S REFERRAL
3.1. Following its investigation, the
Commission concluded that the conduct by Hosanna and Shekinah
constituted a contravention
of section 4(1)(b)(iii) of the Act, in
that they engaged in the conduct referred to in paragraph 2 above.
3.2. In light of its findings, the
Commission decided to refer the complaint on 27 February 2013 to the
Tribunal for determination.
4. AGREEMENT
4.1. Admission
4.1.1. Hosanna admits that its conduct
amounts to a contravention of section 4(1)(b)(iii) of the Act.
4.2. Future Conduct
4.2.1. Hosanna agrees to fully
cooperate, to the extent possible given due regard to the
circumstances, with the Commission in relation
to the prosecution of
the other respondent which is the subject of its investigation and
referral to the Tribunal. Without limiting
the generality of the
foregoing, Hosanna specifically agrees to:
4.2.1.1. Testify before the Tribunal
regarding the conduct and events forming the factual basis of the
Commission’s referral
affidavit and which are covered by this
Settlement Agreement; and
4.2.1.2. To the extent that it is in
existence, provide evidence, written or otherwise, which is in its
possession or under its
control, concerning the alleged
contraventions set out in the Commission's referral affidavit.
4.2.1.3. Desist from engaging in the
conduct complained of.
4.2.2. Hosanna agrees that it will in
future refrain from participating in meeting(s) aimed at engaging in
a cartel conduct which
will lead to a contravention of section 4(1
)(b) of the Act.
4.2.3. Hosanna
agrees that its management and directors will attend a competition
law compliance training programme
incorporating
corporate governance to be provided by the Commission and designed to
ensure that Its employees, management, directors
and agents do not
engage in future contraventions of the Act.
4.2.4. Hosanna will ensure that such
training materials will be made available to afl the employees and
agents of Hosanna.
4.2.5. Furthermore, Hosanna will
update such training materials as often as it is reasonably possible
to ensure, on an ongoing basis,
that its employees, management,
directors and agents do not engage in any future contraventions of
the Act.
5. Administrative Penalty
5.1. In accordance with the provisions
of section 58(1 )(a)(iii) as read with 59(1 )(a) and 59(2), Hosanna
will pay an administrative
penalty in the sum of R37 597.00 (Thirty
Seven Thousand Five hundred and Ninty Seven Rand), which is
equivalent to 5% of It’s
annual turnover for the financial year
ending February 2012 (i.e R751 940.00-Seven Hundred and Fifty One
Thousand Nine Hundred
and Forty Rand).
5.2. This payment shall be made into
the Commission’s bank account, details of which are as follows:
Name: Competition Commission Fee
Account
Bank: ABSA Bank, Pretoria
Account no: 4050778576
Branch code: 323 345
5.3. The Commission will pay this sum
to the National Revenue Fund in terms of section 59(4) of the Act.
6. Terms of Payment
6.1. Payment of the amount referred to
in paragraph 5.1 above will be made within three months of
confirmation of this Agreement
as an order of the Tribunal.
7. Full a net Final Settlement
This agreement, upon confirmation as
an order by the Tribunal, is entered into in HiII and final
settlement and concludes all proceedings
between the Commission and
Hosanna relating to any alleged contravention by Hosanna of the Act
that is the subject of the Commission's
investigation (CC Case no.
2011NOV0370),
Date
and signed at HOSANNA MEDICAL on this the 9th day of MAY 2013
For
Hosanna
Date
and signed at PRETORIA on this the 14th day of MAY 2013
Shan
Ramburuth
The
Commissioner, Competition Commission