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[2015] ZACT 85
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Competition Commission v Basil Read Holdings Limited (CO165Oct15) [2015] ZACT 85; [2015] 2 CPLR 515 (CT) (18 November 2015)
COMPETITION
TRIBUNAL
REPUBLIC
OF SOUTH AFRICA
Case
No: C01650ct15
In
the matter between:
The
Competition
Commission
Applicant
And
Basil
Read Holdings
Limited
Respondent
Panel
: Y Carrim (Presiding Member)
M Mazwai (Tribunal
Member)
F Tregenna (Tribunal
Member)
Heard
on
: 18 November 2015
Decided
on
: 18 November
2015
Consent
Agreement
The
Tribunal hereby confirms the consent agreement as agreed to and
proposed by the Competition Commission and Basil Read Holdings
Limited annexed hereto marked "A".
18
November 2015
Date
_________________
Presiding
Member
Ms
Y Carrim
Concurring:
Ms M Mazwai and
Prof F Tregenna
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA HELD IN PRETORIA
CT
CASE
NO:
_
In
the matter between:
THE
COMPETITION
COMMISSION
Applicant
and
BASIL
READ HOLDINGS
LIMITED
Respondent
CONSENT
AGREEMENT BETWEEN
THE
COMPETITION
COMMISSION
AND BASIL READ HOLDINGS LIMITED,
IN
RESPECT OF
A CONTRAVENTION
OF SECTION 4(1)(b)(iii) OF THE COMPETITION ACT
The
Competition Commission ("Commission") and Basil Read
Holdings Limited ("Basil Read"} 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 a
contravention 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 Act, 1998
(Act No. 89 of 1998), as amended;
1.2
"Basil
Read"
means Basil Read
Holdings Limited, a company incorporated under the laws of the
Republic of South Africa with its principal place
of business at
Basil Read Campus, Romeo Street, Hughs, Boksburg, Gauteng;
1.3
"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);
1.4
"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 151 Floor,
Mulayo Building (Block C), the dti Campus, 77 Meintjies Street,
Sunnyside, Pretoria, Gauteng;
1.5
"Complaints"
means the complaints initiated
by the Commissioner of the Competition Commission in terms of section
49B of the Act under case numbers
2009Feb4279 and 2009Sep4641;
1.6
"Consent Agreement"
means this agreement duly signed
and concluded between the Commission and Basil Read Holdings Limited
;
1.7
"Meyker"
means Meyker Re-Teng Construction
(Pty) Limited;
1.8
"Non-prescribed
prohibited
practices"
refers to prohibited restrictive horizontal practices relating
to the construction industry that are contemplated in section 4(1)(b)
of the Act and that are ongoing or had not ceased three years before
the complaints were initiated, as contemplated in section
67 of the
Act;
1.9
"Parties"
means the Commission and Basil Read
Holdings Limited;
1.10
"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;
1.11
"Wascon"
means Wascon Civils CC;
2
BACKGROUND
2.1
On 1O February 2009, the Commission
initiated a complaint in terms of
section 49B(1) of the Act into alleged prohibited practices relating
to
collusive conduct in the construction of the stadiums for
the 2010 FIFA Soccer World Cup against Group Five, Grinaker-LTA (the
construction
operating business unit of Aveng),
Basil Read (Pty) Ltd, WBHO Construction (Ply)
Ltd, Murray & Roberts Limited, Stefanutti Stocks Limited,
lnterbeton Abu Dhabi nv lie and Bouygues Construction SA.
2.2
In addition, 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 49B(1) of
the Act into
particular prohibited practices
relating
to conduct in respect of construction projects, by the firms listed
below. The 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, Aveng (Africa} Limited, Group Five Ltd,
Murray & Roberts, Concor Ltd, G. Liviero &
Son Building (Pty)
Ltd, Giuricich Coastal Projects (Pty) Ltd, Hochtief Construction AG,
Dura Soletanche- Bachy (Pty) Ltd, Nishimatsu
Construction Co Ltd,
Esorfranki Ltd, VNA Pilings CC, Radio Geotechnics (Ply) Ltd, Diabor
Ltd, Gauteng Piling (Pty) Ltd, Fairbrother
Geotechnical CC,
Geomechanics CC, Wilson Bayly Holmes-Ovcon Ltd and other construction
firms, including joint ventures.
2.3
The Commission's investigation of the above
complaints, 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
apply to engage in settlement on favourable terms. The Invitation was
published on the
Commission's website on 1 February 2011
("Invitation"). 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 terms of the CLP.
2.4
In response to the Invitation and in terms of the Commission's
CLP, Basil Read was first to apply for leniency in
respect of
two non prescribed prohibited practices.
3
CONDITIONAL IMMUNITY
3.1
The Commission granted Basil Read conditional
immunity from
prosecution before the Tribunal for its involvement in cartel conduct
described in paragraph 4 below.
3.2
Basil Read 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
4.1
In its CLP application, Basil Read disclosed its participation
in the following prohibited practice
or contravention of
section 4(1 )(b)(iii) of the Act:
The
Rehabilitation of sections of road P65/2 from Parys to N1
Project (WRT (T) 16/2005)
4.2
In or about July 2006, Basil Read reached an agreement with Wascon
and Meyker, in terms of which these parties agreed on the submission
of
cover prices in relation to the tender for the rehabilitation of
section of road P65/2 from Parys.
4.3
In terms of the agreement,
4.3.1
Basil Read and Wascon would bid an inflated price to enable Meyker to
win the tender; and
4.3.2
Meyker, Wascon and Basil Read agreed to add a loser's fee to their
respective
bids. More particularly, it was agreed that the winner of
the tender would pay R2 000 000.00 to each of the losing bidders as a
loser's fee.
4.4
Meyker was awarded the tender and paid a part of the loser's fee to
Basil
Read during August 2006 and October 2007.
4.5
The project was for the rehabilitation of a section of the road P65/2
from Parys to the N1 in the Free State Province and Sanral was the
client.
5
ADMISSION
Basil
Read 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.
In so far as the Commission is
aware, and
in compliance with the
requirements as set out in the CLP, Basil Read:
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 expeditious co-operation to the Commission
concerning the prohibited practices;
6.1.3.
has provided a written undertaking that it 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.
Basil Read 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, Basil Read
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 in the Competition
Tribunal or the Competition Appeal Court are completed, if any. 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
Basil Read 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
Basil Read shall circulate a statement
summarising the contents of
this Consent Agreement to all management and operational staff
employed at Basil Read within 60 days
from the date of confirmation
of this Consent Agreement by the Tribunal.
7.5
Basil Read 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 bidding. but undertakes
henceforth
to engage in competitive binding.
For
the Commission
Dated
and
signed
at
PRETORIA
on
the
15
th
of
O
ctober 2015
___________________________
THEMBINKOSI
BONAKELE
Competition
Commisioner
For
Basil
Read Holdings Limited
Dated
and
signed
at
BOKSBURG
o
n
the
6
th
day
of
OCTOBER
2015
_____________
Name:
AMANDA CLAIRE WIGHTMAN
Capacity:
CHIEF FINANCIAL OFFICE