EXCLUSIVE: Group Five seeks to change stadia collusion ruling
JOHANNESBURG - Listed Group Five has launched a high court application to review and set aside a decision taken by the Competition Commission to refer a complaint against the group for alleged collusive tendering related to the 2010 Fifa World Cup stadiums to the Competition Tribunal.
The application was heard last week and judgment was reserved. In the commission’s complaint referral to the tribunal, it alleged that in about 2006, Aveng subsidiary Grinaker LTA, Wilson Bayly Holmes-Ovcon (WBHO), Murray & Roberts (M&R), Group Five, M&R subsidiary Concor and Basil Read met twice and reached agreement about the allocation among themselves of the construction tenders for the Mbombela, Peter Mokaba, Moses Mabhida, Soccer City, Nelson Mandela Bay and Cape Town stadiums.
It further alleged these firms agreed cover prices for these tenders and that they should all aim to obtain a 17.5 percent profit margin on all these projects.
Cover pricing involves creating the illusion of competition by some firms submitting non-competitive bids to enable a fellow conspirator to win a tender.
Group Five has challenged the commission’s referral of the complaint to the tribunal and to seek an administrative penalty against the group on three grounds.
The group claimed the commission conducted an unlawful preliminary investigation and had failed to properly initiate an investigation into the World Cup stadia before it commenced its investigation.
This, Group Five alleged, made the commission’s investigation unlawful and its subsequent referral of the complaint to the tribunal was consequently not underpinned by a lawful complaint initiation nor a lawful investigation. Group Five further alleged the commission’s referral decision was in breach of the commission’s undertaking and granting of immunity from prosecution to Group Five for the alleged conduct in the complaint referral.
The commission responded to Group Five’s review application by lodging an application to dismiss the application as “an irregular step”. It claimed the high court did not have jurisdiction to adjudicate on this matter, because it fell within the exclusive jurisdiction of the Competition Tribunal and Competition Appeal Court. The commission further claimed that there was presently litigation pending before the tribunal between the commission and Group Five on the same issue.
Group Five opposed the commission’s application and claimed the high court enjoyed jurisdiction once the issue or question raised concerned the validity of a complaint referral. The group also denied the subject matter before the tribunal was the same as in the high court. It said its review application requested the court to deal with the commission’s unlawful initiation of the complaint and the commission’s conduct in reneging on immunity granted to the group.
- BUSINESS REPORT