The National Prosecuting Authority (NPA) and Hawks will only proceed with their investigation into corruption in the construction industry after the Competition Commission has concluded its fast track settlement process for the sector
Stefanutti Stocks chief executive Willie Meyburgh declined to comment yesterday on the reason for his company’s approach to the NPA, emphasising the matter was sub judice.
However, it is believed the Stefanutti Stocks approach to the NPA was similar to the action taken by Group Five when it was first out of the blocks to approach the Competition Commission in a bid to obtain immunity from prosecution.
Shan Ramburuth, the competition commissioner, confirmed this week that the commission had reached this understanding with the NPA.
He said the commission was hoping to reach settlement agreements with 15 construction firms in terms of its fast-track settlement process and that all these cases would have been settled by June.
The behaviour that constituted collusion, apart from contravening the Competition Act, was also an offence in terms of the Prevention and Combating of Corruption Act, he said.
“I don’t see what precludes somebody from pursuing that in theory. I don’t think it was the NPA’s intention to do so until Stefanutti Stocks raised this issue with them,” he said.
This is in reference to reports last month that Stefanutti Stocks opened a case at the Hawks, handed over affidavits by executives at the company, and the Hawks were investigating fraud and racketeering charges against top construction industry leaders for illegally rigging state and other contracts. These include two Fifa World Cup stadium contracts, worth billions of rand.
Group Five chief executive Mike Upton told Business Report last month that pursuing criminal charges against individuals or organisations for anti-competitive behaviour would be illogical and undermine the commission’s ability to extract information in its corporate leniency programme. He said there could not be “double jeopardy”. This involves a second prosecution for the same offence after acquittal or conviction, or multiple punishments for the same offence.
The commission’s corporate leniency policy was launched in February 2004 and is designed to serve as an incentive for cartel members to blow the whistle on partners in exchange for immunity from prosecution.
It specifically states: “The immunity granted pursuant to the corporate leniency policy does not protect the applicant from criminal or civil liability resulting from its participation in a cartel infringing the act.”
Ramburuth said the disclosure of the Hawks investigation had not had an impact on the work of the commission but had probably “impacted on the parties’ willingness or ability to reveal things or not to reveal things”.
He confirmed that “a bunch of documentation” compiled by the commission that provided details about the transgressions by the construction companies would be publicly available to the NPA to look at in taking “whatever decision they need to take”.
The commission devised the fast-track settlement procedure to incentivise companies to enter into a comprehensive settlement that was financially advantageous.
It aimed to minimise the associated legal costs and speedily resolve cases while strengthening evidence against those firms not taking advantage of the initiative.
Companies were also warned that they faced prosecution and possibly maximum penalties if they failed to come clean and were implicated in anti-competitive behaviour.
Trudi Makhaya, the commission’s advocacy and stakeholder relations manager, said this week that the penalties would “still be quite high” but by not handling transgressions on a case-by-case basis and putting them into one basket limited a firm’s exposure.
Murray & Roberts chief executive Henry Laas said last month that the group anticipated civil damages claims in terms of the Companies Act to be made on principle by some private and public sector clients for past anti-competitive transgressions, but this would not be an “easy entitlement” for these clients to prove.