Construction companies implicated in collusive tendering and bid-rigging hid cover pricing payments and loser’s fees in their financial accounts as invoices and payments for plant hire, the Competition Tribunal has heard.
Cover pricing involves a firm that wishes to win a tender providing its price to a firm that does not wish to win this tender to allow that firm to submit a higher bid. A loser’s fees involves payments to a company for submitting an uncompetitive bid to cover the cost of submitting the tender.
Several companies told the tribunal they had submitted non-competitive bids for tenders because there was high demand for their services and they did not want to win the contract as they did not have the capacity and resources to execute the project.
The tribunal heard details yesterday about the anti-competitive conduct and the settlement agreements reached between the Competition Commission and the guilty firms.
Wilson Bayly Holmes-Ovcon chief executive Louwtjie Nel said the firm was in the process of obtaining legal advice on the appropriate steps to be taken in addressing the practices of employees who were allegedly involved in the contraventions.
Henry Laas, the chief executive of Murray & Roberts (M&R), said six former M&R subsidiary directors were implicated in contraventions but all had left the group.
“We have a strong intent to take legal action against them. This is a process that is under way. None of the current directors of M&R are implicated in any collusive conduct,” he said.
Laas said the group knew the commission findings had angered and disappointed South Africa.
“M&R is a household name in South Africa and played a significant role for more than 110 years in establishing South Africa’s infrastructure. This is the bleakest moment in this history,” he said.
Stefanutti Stocks chief financial officer Dermot Quinn said most of the contraventions by the group happened before its listing, when it was a conglomerate of privately managed companies, each with their own management styles and disciplines, and most of the management of these companies had left the group.
It had also inherited contraventions with the acquisition of Stocks & Stocks in 2008.
Quinn said the group had already engaged the National Prosecuting Authority on the potential consequences for prohibited conduct prior to responding to the commission’s invitation to settle in 2011.
“Certain of the people who participated in those contraventions are still employed by us. The position the board has taken is that it’s not yet appropriate to take a final decision in this regard,” he said.
Tribunal chairman Norman Manoim said its decision on the consent agreement presented to the tribunal for confirmation would be made known in due course.