The Competition Tribunal has confirmed that Fire Protection Systems (FPS) has agreed to pay a fine of R500 000 for collusion in an agreement with the Competition Commission. File Photo: IOL

PRETORIA – The Competition Tribunal has confirmed that Fire Protection Systems (FPS) has agreed to pay a fine of R500 000 for collusion in an agreement with the Competition Commission.

The penalty represents 3.55 percent of FPS’s turnover in South Africa in the financial year to February.

It is the third settlement confirmed by the tribunal since its investigation found that FPS and its competitors tendered collusively by providing each other with cover prices to rig the outcome tenders for fire protection systems from 1999 to at least 2014. 

The investigation initially focused on Afrion Property Services CC, Belfa Fire, Cross Fire Management, FPS Fireco, Fire Control Systems, QD Air and Technological Fire Innovations, but was subsequently extended to include Fireco Gauteng, QD Fire, Keren Kula Mechanical and Tshwane Fire Sprinklers CC.

In July last year the tribunal confirmed that Afrion had agreed to pay a fine of R327 201.85 for collusion with Independent Fire Protection Services, which has since ceased operating.

The tribunal also said Fireco Gauteng, which was subsequently renamed KRS Fire, had also agreed to pay R909 376.29 for collusion.

Katlego Monareng, appearing for the commission, said all the contraventions of price-fixing, market division and collusion took place in the context of a tender, which amounted to collusive tendering. 

Monareng added that there was not any general price fixing of these products outside of a tender.

He said Independent Fire in 2013 and 2014 approached some of the respondents in this market and threatened they were “going to spill the beans” to the competition authorities if they were not given money to keep quiet.

Monareng said this resulted in some of the respondents becoming aware that the conduct they were engaged in was a contravention of the Competition Act.

Bruce Thomas, a director of FPS, said he only found out about the threats by Independent Fire through the documentation that came out from this case, although they had heard rumours about it.

He said FPS ceased participation in the anti-competitive conduct when he put his foot down in the company and indicated he did not want to do it any more. 

Thomas, who has been director of FPS for five years, said the conduct was something that had been inherited.

“Foolishly, I went along with it initially and then decided my conscience could not live with it and put a policy in place to stop that practice,” Thomas said.

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– BUSINESS REPORT