ANC pushes for wider investigation on collusion

While welcoming the outcome of the Competition Commission investigation of the construction industry the ANC has called for such an investigation to be broadened so as to deal with suspected endemic collusive behavior in the private sector.

In a statement released yesterday the ruling party said it “calls upon the Competition Commission to initiate a process similar to the Settlement Process of the Construction Industry to include other industries so as to fully assess the extent of the problem of bid-rigging and collusion”.

The statement follows an announcement by the commission that it has reached an settlement agreements with 15 of the 21 companies identified in the report. The settlements will net about R1.46bn in fines. Companies touched by this investigation include the largest players in the country such as Aveng, Murray & Roberts, Basil Read, Group Five, WBHO, Stefanutti Stocks, Raubex, Esorfranki and Giuricich . The commission said three firms; Group Five, Construction ID and Power Construction, did not accepted the settlement deal and face prosecution.

The bid rigging scandal is said to have affected contracts valued at a total of about R40bn.

The ANC said while it welcomes this ruling, it was unfortunate that these companies were only prepared to make full disclosure as a result of a plea bargain that saw them get fined lesser fines than they would have been if prosecuted. “Those companies that defined themselves outside of the process must now face the full might of the law”.

The Commission has been on the prowl over the past few years flushing out collusion in a number of sectors including in the food industry, telecommunications and in the construction materials sector. The commission is also busy with a couple of other investigations which could expose further anticompetitive behaviour. These include an investigation of the print media sector which has shaped up into an oligopoly of four giants, Independent Newspapers, Times Media Group, Naspers (Media 24) and Caxton. This investigation is set to cause even more noise as directly linked to the transformation theme. One has to wonder if Iqbal Surve has factored in this investigation in buying Independent Newspapers.

The ANC said “The private sector must be provided an opportunity to come forward and make disclosure of any activities of collusion they may be involved in and those who fail to do so must be brought to book to deal with this scourge that is robbing the poorest of the poor in our society. This practise of collusion diverts money from, in particular the public purse, which is the biggest single spender, to the complicit pockets of big business and the private sector in general”.

“Our people continue to suffer under the burden of high prices and our economy fails to adequately ensure equitable and broad based access to economic opportunities as a result of this anti-competitive and unscrupulous behaviour in the private sector”.

The ANC added that the genesis of the corruption that has become so endemic in our society is in the private sector and presents itself in many forms including anti-competitive behaviour and collusion. “For every act of corruption, there is a shady business person lurking in the corner to grease the palm of a greedy public servant”.

The business community has also welcomed the Commissions findings. Business Unity South Africa (BUSA) CEO Nomaxabiso Majokweni said “BUSA is on record as strongly supporting the competitive system and deplores any anti-competitive and unethical behavior in the marketplace. A competitive system is one which is likely to grow faster and create more jobs in the medium term and any collusive activity which undermines it will have a negative impact on SA’s economic performance”.

The Black Business Council is seeing red saying anticompetitive behaviour has cost transformation of the economy by unfairly raising entry barriers for new comers.

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