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[2015] ZACT 108
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Competition Commission v Stefanutti Stocks Holdings Limited (CO142Sep15) [2015] ZACT 108; [2015] 2 CPLR 610 (CT) (14 October 2015)
COMPETITION
TRIBUNAL
REPUBLIC
OF SOUTH AFRICA
Case
No:
C0142Sep15
In
the matter between:
The
Competition
Commission
Applicant
And
Stefanutti
Stocks Holdings
Limited
Respondent
Panel
: N Manoim (Presiding Member)
: F Tregenna (Tribunal
Member)
: A Roskam (Tribunal
Member)
Heard
on
: 14 October 2015
Decided
on
: 14 October 2015
Consent
Agreement
The
Tribunal hereby confirms the consent agreement as agreed to and
proposed by the Competition Commission and Stefanutti Stocks
Holdings
Limited anne ed hereto marked "A".
1
4
October
2015
Date
_____________________
Presiding
Member
Mr
N Manoim
Concurring:
Prof F Tregenna
and
Mr A
Roskam
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA
HELD
IN PRETORIA
CT
CASE NO:
CC
CASE NO: 2009Sep4641
In
the matter between:
THE
COMPETITION
COMMISSION
Applicant
and
STEFANUTTI
STOCKS
HOLDINGS
LI
M
I
TED
Respondent
CONSENT
AGREEMENT IN TERMS OF SECTION 490 READ WITH
SECTION 58(1)(b)
OF THE
COMPETITION ACT, NO. 89 OF 1998
, AS AMENDED, BETWEEN THE COMPETITION
COMMISSION AND STEFANUTTI STOCKS HOLDINGS LIMITED, IN RESPECT OF
CONTRAVENTIONS OF
SECTION 4(1)(b)(iii)
OF THE
COMPETITION ACT
The
Competition Commission ("Commission") and Stefanutti Stocks
Holdings Limited ("Stefanutti") hereby agree that
application be made to the Competition Tribunal ("Tribunal")
for the confirmation of this Consent Agreement as an order
of the
Tribunal in terms of
section 490
read with
section 58(1)(b)
of the
Competition Act no. 89 of 1998
, as amended ("the Act"), in
respect of contraventions of
section 4(1)(b)(iii)
of the Act
1
DEFINITIONS
For
the purposes of this consent agreement the following definitions
shall apply
1.1
"Act"
means the Competition Ac 1998 (Act No.
89 of 1998), as amended;
1..2
"Afristruct"
means Afristruct Projects (Pty)
Ltd;
1.3
"CE&B"
means lnhlanhla Civils (Pty) Ltd trading
as Civil Engineering & Build cc;
1.4
"CLP"
means the Commission's Corporate
Leniency Policy (Government Notice No. 628 of 23 May 2008, published
in Government Gazette No.
31064 of 23 May 2008);
1.5
"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 1•1 Floor,
Mulayo Building (Block C), the dti Campus, 77 Melntjies Street,
Sunnyside, Pretoria, Gauteng;
1.6
"Consent
Agreement"
means this
agreement duly signed and concluded between the Commission and
Stefanutti;
1.7
"Esorfranki"
means Esotfranki (Pty) Ltd;
1.8
"Invitation"
means the Invitation to Firms in the
Construction Industry to Engage in Settlement of Contraventions of
the
Competition Act dated
1 February 2011;
1.9
"Parties"
means the Commission and
Stefanutti;
1.10
"Stefanutti" means Stefanutti Stocks Holdings Limited, a
company incorporated under the laws of the Republic of South
Africa
with its principal place of business at Protec Park, corner
Zuurfontein Avenue and Oranjerivier Drive, Chloorkop Kempton
Park,
East Rand; and
1.11
'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 3rd Floor, Mulayo building (Block
C), the dti Campus, 77 Meintjies Street,
Sunnyside, Pretoria,
Gauteng.
2
BACKGROUND
2.1
On 1 September 2009, following the receipt of applications for
immunity in terms of the CLP, the Commission initiated a complaint
in
terms of
section 498(1)
of the Act into particular prohibited
practices relating to conduct in respect of numerous construction
projects, by the firms
listed below. This complaint concerned alleged
contraventions of
section 4(1)(b)
of the Act with regard to price
fixing, market allocation and collusive tendering. The investigation
was initiated against the
following firms: Stefanutti Stocks Holdings
Limited, Aveng (Africa) Limited, Group Five Ltd, Murray &
Roberts, Concor Ltd,
G. Liviero & Son Building (Ply} Ltd,
Giuricich Coastal Projects (Pty) Ud, Hochtief Construction AG, Dura
Soletanche-Bachy (Ply)
Ltd, Nishimatsu Construction Co Ltd,
Esorfranki Ltd, VNA Pilings CC, Radio Geotecnics (Pty) Ltd, Diabor
Ltd, Gauteng Piling (Pty)
Ltd, Fairbrother Geotechnical CC,
Geomechanics CC, Wilson Bayly Holmes Ovcon LTD and other
construction firms, including joint
ventures.
2.2
T.he Commission's investigation ofthe above complaint, as well as
several other of the Commission's investigations in the construction
industry, led the Commission to believe that there was widespread
collusion in contravention of
section 4(1)(b)(iii)
of the Act in the
construction industry. Accordingly, in line with the purpose of the
Act as well as the Commission's functions,
the Commission decided to
invite construction firms that were involved in collusive conduct to
settle with the Commission on favourable
terms. This Invitation was
published on the Commission's website on 1 February 2011. This was
also done in the interests of transparency,
efficiency, adaptability
and development of the construction industry, the provision of
competitive prices, as well as in order
to expedite finalisation of
the investigations, under a fast track process. The Invitation
specifically provided that it was open
to firms to also apply for
leniency in tenms of the CLP.
2.3
In response to the Invitation and in terms of the Commission's CLP,
Stefanutti was first to apply for leniency in respect of
the conduct
described
in
paragraph 4 below.
3
CONDITIONAL IMMUNITY
3.1
The Commission granted Stefanutti conditional immunity from
prosecution before the Tribunal for its involvement in the prohibited
practices described in paragraph 4 below.
3.2
In exchange for conditional immunity, Stefanutti,
inter
alia,
agreed to co- operate with the Commission in respect of any steps
that the Commission may deem necessary to obtain an order
from the
Tribunal declaring the conduct set out in paragraph 4 below to be a
contravention of
section 4(1)(b)(iii)
of the Act.
4
CONDUCT
IN
CONTRAVENTION OF
THE
ACT
Stefanutti
disclosed its pa1ticlpation in the following prohibited practices in
contravention of section 4(1)(b)(iii) of the Act:
4.1
The
Rainbow
Farms
Building
Tender:
Tender
Reference
No.
2005/13
In
or about December 2005 Stefanutti reached an agreement with CE&B
in terms of which Stefanutti and CE&B agreed to add
a loser's fee
to their respective tenders in relation to the Rainbow Farms Building
project.
In
terms of the agreement, Stefanutti agreed to pay R56 985.18 to CE&B
as a loser's fee in the event that Stefanutti won the
tender.
Stefanutti
was awarded the tender and paid the loser's fee to CE&B on 4
October 2006.
4.2
Lanxess
Groundwater Remediation
Project:
Tender
Reference
No.
05-
922-100
In
or about June 2006 Stefanutti reached an agreement with Esorfranki in
tenms of which Stefanutti and Esorfranki agreed that Stefanutti
would
submit a bid higher than that of Esorfranki in order to ensure that
Esorfranki won the tender. It was further agreed that
Esorfranki
would pay a loser's fee to Stefanutti in the amount of approximately
R1 million in the event that it won the tender.
Esorfranki
was awarded the tender and paid the loser's fee during the period
June, August, September and October 2007,
5
ADMISSION
Stefanutti
admits that the conduct set out in paragraph 4 above is collusive
tendering in contravention of section 4(1}{b)(iii)
of the Act.
6
CO-OPERATION
6.1
ln so far as the Commission is aware, and in compliance
with the requirements as set out in the CLP, Stefanutti:
6.1.1
has provided the Commission with truthful and timely disclosure,
including information and documents in its possession or
under its
control, relating to the prohibited practices;
6.1.2
has provided full and expect itious cooperation to the Commission
concerning the prohibited practices;
6.1.3
has provided a written undertaking thatit has immediately ceased to
engage in, and will not in future engage
in,
any form
of prohibited practice;
6.1.4
has confirmed that it has not destroyed, falsified or concealed
information, evidence and documents relating to the prohibited
practices;
6.1.5
has confirmed that it has not misrepresented or made a wilful or
negligent misrepresentation concerning the material facts
of any
prohibited practice or otherwise acted dishonestly.
7
FUTURE CONDUCT
7.1
Stefanutti confirms that it no longer engages in the conduct set out
In paragraph 4 above.
7.2
In compliance with the requirements as set out in the CLP, Stefanutti
agrees and undertakes to provide the Commission with full
and
expeditious co-operation from the time that this Consent Agreement is
concluded until the subsequent proceedings, if any, in
the
Competition Tribunal or the Competition Appeal Court are completed.
This includes, but is not limited to:
7.2.1
to the extent that it is in existence and has not yet been provided,
providing (further) evidence, written or otherwise, which
is in its
possession or under its control, concerning the contraventions
contained in this Consent Agreement;
7.2.2
availing its employees and former employees to testify as witnesses
for the Commission in any cases regarding the contraventions
contained in this Consent Agreement.
7.3
Stefanutti shall continue to implement and monitor a competition law
compliance programme incorporating corporate governance
designed to
ensure that its employees, management, directors and agents do not
engage in future contraventions of the Act. In particular
such
compliance programme will include mechanisms for the
monitoring and detection of any contravention of the Act.
7.4
Stefanutti shall circulate a statement summarising the contents of
this Consent Agreement to all management and operational
staff
employed at Stefanutti within 60 days from the date of confirmation
of this Consent Agreement by the Tribunal.
7.5
Stefanutti will not in the future engage in any form of prohibited
conduct and will not engage in collusive tendering which
will distort
the outcome of tender processes but undertakes henceforth to engage
in competitive bidding.
For
the
Commission
Dated
and
signed
at
PRETORIA
on
the
9
day of
Sept
2015
For
Stefanutti
Dated
and signed at
Kempton Park
on
the
31
day
of
August
2015
____________________
Name:
Chief
Executive Officer