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JOHANNESBURG - A consent agreement in terms of which Motseng Trading, a subsidiary of Motseng Investment Holdings (MIH), would pay a fine of R200000 for agreeing with Da Gama Textiles to fix prices for tenders issued by the National Treasury and state arms procurement company Armscor has been confirmed by the Competition Tribunal.

The penalty, which will be paid by MIH, because Motseng Trading has been wound up, amounts to 3.2percent of Motseng Trading’s annual turnover for its 2015 financial year.

It follows Motseng appearing before a tribunal hearing last month and Da Gama Textiles settling its case in January last year by agreeing to pay a fine of R2.1million.

Da Gama Textiles and Motseng Trading, together with a third company, were involved in bid rigging of tenders issued by the National Treasury and Armscor for the supply of fabric used to manufacture uniforms for the Department of Correctional Services, SA Air Force, SA Military Health Services and the SA Army.

Of these tenders, the National Treasury issued three tenders and Armscor issued six tenders.

The matter involving Monoge Mining has not yet been concluded.

Tenders

Matodzi Sivhaga, appearing for the Competition Commission, told a tribunal hearing last month that an investigation initiated by the commission in September 2013 found that Da Gama Textiles and Motseng Trading discussed tenders and agreed on prices that each of them would quote in their bids.

Sivhaga said Da Gama Textiles, as one of the manufacturers of fabric, was not black economic empowerment (BEE) compliant and divided their business into Motseng Trading to benefit from tenders issued by the National Treasury and Armscor, despite not being compliant with BEE requirements.

He said Motseng Trading admitted contravening the Competition Act and the settlement agreement placed before the tribunal on September 2015 for confirmation, which related to only one complaint, was withdrawn in December last year and replaced by this all-in-one settlement.

Sivhaga said the commission had taken a number of factors into account in accepting the penalty imposed on Motseng Trading.

“Even though this conduct involved multiple tenders, it is in essence just one arrangement with Da Gama on how to deal with tenders in situations where Da Gama was a supplier.

“The relationship with Da Gama ended as soon as both firms became aware that their conduct was under investigation, which was in 2013,” he said.

Sivhaga said Motseng Trading was a small firm that did not have any manufacturing capacity and, as a result, sourced fabric from manufacturers, such as Da Gama Textiles.

-BUSINESS REPORT