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[2013] ZACT 59
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Competition Commission v Shekinah Medical and Disposables CC (016857) [2013] ZACT 59; - (16 July 2013)
COMPETITION TRIBUNAL
OF SOUTH AFRICA
Case
No: 016857
In
the matter between:
The
Competition Commission
...........................................................................................
Applicant
And
Shekinah
Medical and Disposables CC
........................................................................
Respondent
Panel:
A Wessels (Presiding Member)
A
Ndoni (Tribunal Member)
M
Mokuena (Tribunal Member)
Heard
on: 16 July 2013
Decided
on : 16 July 2013
Order
The
Tribunal hereby confirms the order as agreed to and proposed by the
Competition Commission and the Respondent, attached hereto
as
“
Annexure A”,
to
be read with the addendum to the Settlement Agreement, attached
hereto as “
Annexure B”.
A
Wessels
Presiding
Member
Concurring:
A Ndoni and M Mokuena
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
SHEKINAH
MEDICAL & DISPOSABLES CC
..................................................................
Respondent
In
re:
THE
COMPETITION COMMISSION Applicant
SHEKINAH
MEDICAL & DISPOSABLES CC Respondent
HOSANNA
MEDICAL & DISPOSABLES CC Respondent
SETTLEMENT
AGREEMENT BETWEEN THE COMPETITION COMMISSION AND SHEKINAH MEDICAL &
DISPOSABLES CC (“SHEKINAH”) IN REGARD
TO ALLEGED
CONTRAVENTION OF
SECTION 4(l)(b)(iii)
OF THE
COMPETITION ACT 89 OF
1998
, AS AMENDED.
The
Commission
and Shekinah 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 1990), 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
Melntjies Street, Sunnyside, Pretoria, South Africa;
1.3.
“Commissioned
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 numben2011NOV0370. The National Treasury is a government
Department that is responsible for,
inter
alia,
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 Shekinah;
1.6.
“
Shekinah”
means Shekinah Medical & Disposables CC, a close corporation duly
registered and incorporated in terms of the Close Corporation
Act, 69
of 1984, with its main place of business at 43 Adcock Street,
Chamdor, Krugersdorp, Gauteng Province.
1.7.
"
Parties
"
means the Commission and Shekinah;
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, Muiayo Building, the DT! Campus, 77 Meintjies Street,
Sunnyside, Pretoria, South Africa,
1.9.
"
Respondents
"
means ail 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
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 RT41-201 1ME, being a tender which was advertised on the
10
th
of December 2010 on behalf of the National Department of Health
(“NDoH”).
The
Commission investigated the alleged conduct and found that
in
deed, the respondents had multiple contacts with each other regarding
the tender as follows;
On
or about November 2010, Garson Naidoo {“Naidoo")
representing Hasanna 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.
Abboy
offered to assist Naidoo, with the help of his Chinese-based
supplier or agent, Grand Ocean, to secure a supplier wtth
a
different brand of products.
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
price adjustment procedure, and
specialist functions contract management
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)p) 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 refeF the
complaint on 27 February 2013 to the Tribunal for determination.
4.
AGREEMENT
4.1.
Admission
4.1.1.
Shekinah admits that its conduct amounts to a contravention of
section 4{1)(b)p) of the Act.
4.2.
Future Conduct
4.2.1.
Shekinah 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, Shekinah 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.
Shekinah 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.
Shekinah 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.
Shekinah will ensure that such training materials will be made
available to ail the employees and agents of Shekinah.
4.2.5.
Furthermore, Shekinah 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),. Shekinah will pay an administrative
penalty in the sum of R143 143.69.00 (One Hundred and Forty Three
Thousand One Hundred and Forty Three Rand Sixty Nine Cents),
which is
equivalent to 4% of it's affected turnover for the financial year
ending February 2012 (i.e R3 578 592,15-Three Million
Five Hundred
and Seventy Eight Thousand Five Hundred and Ninety Two Rand Fifteen
Cents).
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
as follows; 50% of the penalty will be payable within
60 days of the
Tribunal’s order and the remaining balance (Le 50%) payable
within 12 months of the Tribunal's order.
7.
Full and Final Settlement
This
agreement, upon confirmation as an order by the Tribunal, is entered
into in full and final settlement and concludes all proceedings
between the Commission and Shekinah relating to any alleged
contravention by Shekinah of the Act that is the subject of the
Commission's
investigation (CC Case no. 2011NOV0370),
Dated
and signed at
JHB on this the 7
th
day of JUNE 2013
For
Shekinah
Dated
and signed at
PRETORIA on this the 12
th
day of
JUNE 2013
For
the Commission
Competition
Commissioner
ADDENDUM
TO SETTLEMENT AGREEMENT BETWEEN SHEKINAH MEDICAL AND DISPOSABLES CC
AND THE COMPETITION COMMISSION
The
parties agree that the clause set out hereunder shal! replace Clause
4,2.3 of the attached settlement agreement signed by
the Competition
Commissioner dated 12 June 2013.
4.2.3.
Shekinah agrees to develop and implement a compliance programme
incorporating corporate governance, designed to ensure
that its
employees, management, directors and agents do not engage in conduct
in contraventions of section 4(1 )(b) of the Act,
details of which
programme shall be submitted to the Commission within 60 days of the
date of confirmation of this agreement
as an order of the Tribunal
Dated
and signed
on this the 16
th
day of JULY 2013
For
the Commission
Competition
Commissioner