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[2013] ZACT 60
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Competition Commission v Cast Industries (Pty) Ltd (017129) [2013] ZACT 60 (16 July 2013)
COMPETITION
TRIBUNAL
REPUBLIC
OF SOUTH AFRICA
Case
No: 017129
In
the matter between:
The
Competition Commission Applicant
and
Cast
Industries (Pty) Ltd Respondent
Panel: A
Wessels (Presiding Member), M Mokuena (Tribunal Member) and A Ndoni
(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
marked
Annexure “A”, to be read with the addendum to the
settlement agreement, attached hereto as Annexure “B”.
Presiding
Member A Wessels
Concurring:
M Mokuena and A Ndoni
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA
(HELD
IN PRETORIA)
CT
Case No: 30/CR/Mar12
CC
Case No.: 2009May4419
In
the matter between:
The
Competition Commission Applicant
and
CAST
INDUSTRIES (PTY) LIMITED Respondent
SETTLEMENT
AGREEMENT BETWEEN THE COMPETITION COMMISSION AND CAST INDUSTRIES
(PTY) LIMITED IN REGARD TO A CONTRAVENTION OF SECTION
4(1)(b)(i) OF
THE COMPETITION ACT, NO, 89 OF 1998 (AS AMENDED)
The
Competition Commission (“Commission”) and Cast Industries
(Pty) Limited (“Cast industries') hereby agree that
an
application be made to the Competition Tribunal (Tribunal") for
confirmation of this Settlement Agreement as an order of
the Tribunal
in terms of sections 58(1)(a)(iii) and 59(l)(a) of the Competition
Act, No. 89 of 1998 (as amended), on the terms
set out below:For the
purposes of this Settlement Agreement the following definitions shall
1.
Definition
For
the purposes of this Settlement Agreement the following definitions
shall
apply
1.1.
“Bosun Brick
”
means Bosun Brick Midrand (Pty) Ltd, a company duly registered and
incorporated in terms of the company laws of the Republic
of South
Africa, with its principal place of business at comer Cresset and
Musket Roads, Midrand Industrial Park, Mid rand;
1.2.
“CLP” means the corporate leniency policy of the
Commission published in the Government Notice No. 628 of 23 May
2008,
in Government Gazette No. 31064 of 23 May 2008.
1.3.
“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
f
Mulayo Building, dti Campus, 77 Meintjies Street, Sunnyside,
Pretoria, Gauteng;
1.4.
“Commissioner
”
means the Commissioner of the Competition Commission, appointed in
terms of section 22 of the Act;
1.5.
“Concor Technlcrete”
means Murray
&
Roberts Building Products (Pty) Ltd t/a Concor Technicrete a company
duly incorporated in terms of the company laws of the Republic
of
South Africa, with its principal place of business at corner Main
Reef and Houtkapper Street, Rooderpoort, Johannesburg;
1.6.
“Complaint*
means the complaint initiated by the Commissioner on 07 May 2009 in
terms of section 49B{1) of the Act under case number 2009May4419
against the respondents for alleged contravention of section 4(1
)(b)(j) of the Act;
1.7.
"Generic paving blocks
”
means paving blocks which include interlocking and bevelled paving
blocks used in the industrial, commercial and residential
markets in
South Africa;
1.8.
“
Infraset
”
means Aveng (Africa) Limited t/a Infraset, a company duly registered
and incorporated in terms of the company laws of the Republic
of
South Africa, with its principal place of business at 204 Rivonia
Road, Morningside, Sandton;
1.9.
“MVA Bricks
”
means MVA Bricks (Pty) Limited, a company duly registered and
incorporated in terms of the company laws of the Republic
of South
Africa, with it principal place of business at Roger Dyson Road,
Pretoria West industrial, Pretoria;
1.10.
"New Cast Industries
n
refers to a company currently registered as Cast Industries (Pty) Ltd
with registration number 2007/022665/07 and with its principal
place
of business at 38 Spanner Road, Clayville Industrial, Midrand. Cast
Industries (Pty) Ltd was originally registered and incorporated
as
Burnleigh Investments (Pty) Ltd and changed to its current name on 18
September 2008;
1.11.
"Old Cast
Industries
"
refers to Brimacks Trading (Pty) Ltd with registration number
1993/003790/07. Brimacks Trading (Pty) Ltd was originally registered
and incorporated as Cast Industries (Pty) Ltd and changed to its
current name on 18 September 2008;
1.12.
"Respondents
”
means
Infraset
,
Bosun
Brick, Cast Industries, Concor Technicrete, Vibro Bricks
and
MVA
Bricks
;
1.13.
“
Settlement
Agreement'
means this agreement duly signed and concluded between the
Commission
and
new
Cast Industries
;
1.14.
"The
Act’
means the
Competition Act, No. 89 of 1998
, as amended;
1.15.
“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, DTI Campus, 77
Meintjies Street, Sunnyside, Pretoria, Gauteng;
1.16.
“Vibro Bricks
"
means Vibro Bricks (Pty) Ltd, a company duly registered and
incorporated in terms of the company laws of the Republic of
South
Africa, with it principal place of business at Schurweburg Street,
Mooiplaas, Laudium, Pretoria.
2.
Complaint investigation and the Commission’s findings
2.1.
On 22 October 2008
Infraset
applied for corporate leniency in terms of the
CLP
regarding its involvement in a cartel in the market for the
manufacture and supply of
generic
paving blocks
in South Africa. In the
CLP
application,
Infraset
submitted information and documents to the
Commission
indicating,
inter
alia
,
the
respondents
held meetings and discussions as a result of which they,
Inter
alia,
agreed to fix the selling price of
generic
paving blocks
in contravention of section
4^){b)0)
ol the Act
2.2.
Following
Infraset's
application for corporate leniency, on 07 May 2009 the
Commissioner
Initiated a
complaint
in terms of section 49B(1j of
the
Act
against the
respondents.
The
Commission
duly investigated the
complaint
and found that the
respondents
had entered into an agreement, arrangement and understanding
involving the fixing of the selling price of
generic
paving blocks
in contravention of section 4(1 )(b)(f) of
the
Act
The fixing of the selling price included an agreement among the
respondents
on,
inter
alia
,
minimum prices, transport costs and price increases of
generic
paving blocks
.
The
Commission's
investigation established that the aforementioned conduct of the
respondents
commenced in or about 2001 and continued until at least 2008.
2.3.
The
new
Cast Industries
alleges that:
2.3.1.
it was incorporated on 15 August 2007 as Burnfergh investments (Pty)
Ltd with registration number 2007/022665/07;
2.3.2.
on 01 March 2008 Burnieigh Investments (Pty) Ltd acquired as a going
concern the business of a company which at the time
of the
acquisition was registered as Cast Industries (Pty) Ltd (“old
Cast Industries
1
')
but is now registered as Brimacks Trading (Pty) Ltd with registration
number 1993/003790/07;
2.3.2.
as part of the sale of business agreement Burnieigh Investments (Pty)
Ltd changed its name to Cast Industries (Pty) Ltd (“new
Cast
Industries”) on 18 September 2008 and
old
Cast Industries
changed
its name to Brimacks Trading (Pty) Ltd;
2.3.4.
the
new
Cast Industries
was not involved in cartel conduct and came into existence four
months before the demise of the cartel in 2008; and
2.3.5.
the shareholding in
new
Cast Industries
has changed several times since it acquired the business of
old
Cast industries
and there is no one currently in the employ of
new
Cast Industries
who
has any personal knowledge of any of the facts set out by the
Commission in its referral of this matter to the Competiton Tribunal.
2.4.
The Commission found that the
new
Cast Industries
is liable for payment of the administrative penalty on the basis of,
inter
alia,
that the business of the
old
Cast Industries
was acquired as a "going concern" and
old
Cast Industries
did not indemnify the
new
Cast Industries
from liability for payment of the administrative penalty in terms of
the
Act,
3. Settlement
Discussions
3.1.
On 22 January 2013
new
Cast Industries
made a written settlement proposal to the
Commission
.
Following
new
Cast Industries
'
settlement proposal, the
Commission
and
new
Cast Industries
engaged in settlement discussions.
3.2.
On 18 March 2013 the
Commission
and
new
Cast Industries
reached an agreement, the outcome of which is this
Settlement
Agreement
4.
Admission
New
Cast Industries
admits that
old
Cast Industries
engaged in conduct in contravention of section 4(1)(b)(i) of the
Act
5.
Administrative Penalty
5.1.
New Cast Industries
is liable to pay an administrative penalty in terms of section
58(1)(a)(iii), read with sections 59(1)(a)
f
59(2) and (3) of
the
Act
in the amount of R567 970.48 (FIVE HUNDRED AND SIXTY SEVEN THOUSAND
AND NINE HUNDRED AND SEVENTY RAND AND FOURTY-EIGHT CENT)
representing 2.5% of New Casf
Industries'
affected turnover for the financial year ended in February
2011
.
5.2.
New Cast Industries
will pay the administrative penalty to the
Commission
within six (6) months after the date of the confirmation of this
Settlement
Agreement
as an order of the
Tribunal;
5.3.
New Cast Industries
shall remit payment of the administrative penalty into the following
bank account:
Name
of account holder: COMPETITION COMMISSION
Bank
name: ABSA Bank Pretoria
Account
number:
4060778576
Branch
Code: 323345
7.3.
The
Commission
will pay the administrative penaJty into the National Revenue Fund
in terms of section 59(4) of
the
Act.
8.
Full and final settlement
This
Settlement
Agreement,
upon confirmation thereof as an order by the
Tribunal
concludes alt proceedings between the
Commission
and
new
Cast Industries
in relation to the contravention of section 4(1)(b)(i} of
the
Act
,
referred to the
Tribunal
under case number: CT Case No: 30/CR/Mar12.
SIGNED
a
t
MIDRAND
on this th
e
12
d
ay
o
f
JUNE 2
013.
Duly
authorised signatory
Cast
Industries (Pty) Ltd
SIGNED
a
t
PRETORIA
on this th
e
21
d
ay
o
f
JUNE 2
013.
Shan
Ramburuth
The
Commissioner, Competition Commission
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA
(HELD-IN
PRETORIA)
CT
Case No: 30/CR/Mar12
CC
Case No: 2009May4419
In
the matter between:
THE
COMPETITION COMMISSION Applicant
and
CAST
INDUSTRIES (PTY) LTD Respondent
ADDENDUM
TO THE SETTLEMENT AGREEMENT BETWEEN THE COMPETITION COMMISSION”
AND CAST INDUSTRIES (PTY) UMTTED
-
IN
-
RESPECT
OF CONTRAVENTION OF SECTION 4(1)(b)(i) OF THE COMPETITION ACT, NO. 89
OF 1998 (AS AMENDED)
The
settlement agreement between the Competition Commission and New Cast
Industries (Pty) Limited dated 21 June 2013 (“the
settlement
agreement”) is hereby amended as follows:
Insertion
of paragraph 4A In the settlement agreement.
1.
Paragraph 4A is hereby inserted in the settlement agreement.
2.
The inserted paragraph 4A shall read as follows:
4A.
Agreement concerning future conduct
New
Cast Industries
agrees and undertakes to:
4.1.
prepare
and circulate a statement summarising the content of this
Settlement
Agreement
to its employees who are managers and to its directors and relevant
cosporate governance structures within one (1)
month
after the date of confirmation of this
Settlement
Agreement as
an
order
of the
Tribunal;
4.2.
develop and implement a compliance programme in order to ensure that
its employees, management and directors do not engage
in any conduct
which
constitutes a prohibited practice in terms of
the
Act.
4.3.
A copy of the compliance programme shall be submitted to the
Commission
within three (3) months after the date of confirmation of this
Settlement
Agreement
as an order of the
Tribunal
SIGNED
a
t
MIDRAND
on this th
e
15
d
ay
o
f
JULY 2
013.
Duly
authorised signatory
Cast
Industries (Pty) Ltd
SIGNED
a
t
MIDRAND
on this th
e
16
d
ay
o
f
JULY 2
013.
Shan
Ramburuth
The
Commissioner, Competition Commissioner