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Company fined R900 000 for colluding

Business Report
Pretoria - The Competition Tribunal has fined contractor Giuricich Coastal Projects R900 000 by for engaging in cover pricing with Grinaker-LTA, a wholly owned subsidiary of listed Aveng, when tendering in 2008 for the Mondi Reel Handling Project in KwaZulu-Natal.

Aveng was previously granted conditional immunity for the contravention. Giuricich refused to settle the case and the Competition Commission referred it to the tribunal for prosecution in 2014.

The tender was a turnkey project for the design and construction of a 2000m² truck loading building, floor upgrades for automated vehicle use and civil works necessary for the installation of reel handling conveyors in Mondi’s Merebank mill.

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File picture: Independent Media

Mondi invited Giuricich, Grinaker-LTA and Stefanutti Stocks to submit a design and construction proposal for the project, but Stefanutti Stocks did not tender for the project.

The price Giuricich allegedly submitted for the project was R33.455 million while Grinaker’s price was R32.62 million. The project was awarded to Grinaker.

Tsakane Morolen, counsel for Giuricich, told the tribunal during closing arguments on the case in January that Giuricich denied any knowledge of the price it was alleged to have submitted for the project and none of the commission’s witnesses could explain how “that price came to be”, who submitted it, when it was submitted and how it was submitted.

Mondi’s documents related to the project were destroyed during a fire in 2013 at a Metrofile storage facility.

Only witness

The case hinged on a telephone call that took place in February 2008 between Giuricich chief executive Rodney van der Walt, who was managing director of the firm at the time of the alleged contravention, and Alastair McNair, who then was Grinaker’s proposals manager.

Morolen said the only witness called by the commission who could confirm that the price attributed to Giuricich on a specific form was the cover price was McNair.

But Morolen stressed McNair said he did not communicate the cover price to Giuricich, he did not know who on behalf of Grinaker did so and when this was done.

Morolen said McNair could also not confirm that the price attributed to Giuricich was the cover price. He said the commission also had to prove that the price submitted by Giuricich was not independently calculated by the firm.

Kamogelo Maputla, appear­ing for the commission, told the tribunal in closing argument that Van der Walt had been constantly preaching that McNair had told him to back off from tendering for the project and he had agreed to back off.

Maputla said that Van Wyk had conceded the decision to back off from the project was not an independent decision and was reliant on the phone call between McNair and Van der Walt. He claimed the first cover price agreement was reached between the two firms for the Mondi project and a second cover price agreement was reached for a Unilever project, which had been settled.

The tribunal said on Monday it would release detailed reasons next week for its findings in the case.

BUSINESS REPORT

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