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JSE-listed construction major Group Five says its lawyers have advised it that there are “evidentiary hurdles” in two cases of alleged collusion referred to the Competition Tribunal by the Competition Commission.
The commission on Tuesday referred a case of alleged collusive tendering relating to the rehabilitation of the N5, section 4 between Senekal and Vaalpenspruit, in the Free State, against Group Five to the tribunal.
It had asked the tribunal to impose the maximum penalty of 10% of Group Five’s yearly turnover.
The commission alleged that Group Five had entered into “bilateral collusive agreements” with fellow construction firms WBHO and Murray & Roberts subsidiary Concor, which is now Murray & Roberts Construction, in terms of which Group Five would submit a lower bid price than WBHO and Concor to ensure it won the tender.
The commission had also, in November 2014, referred a case of alleged collusive tendering against Group Five in relation to the construction of stadiums for the 2010 FIFA World Cup. The commission had also referred cases against WBHO Construction, Stefanutti Stocks, Basil Read and Isipani Construction to the tribunal for the same alleged conduct, while Murray & Roberts had been granted leniency.
Group Five’s lawyers have indicated that the group had “good prospects of success” in opposing the two cases.
The construction group said the referral of these cases was a positive step towards “fully ventilating the issues in respect of the alleged conduct, interrogating the evidence in the possession of the commission and obtaining an objective decision on the group's liability from the tribunal”.
Although it would not comment on the expected quantum of the potential administrative penalties it could face, Group Five was confident that it was “adequately covered” by the provision made in the 2013 financial year for any potential penalties.
The group further pointed out that the commission had, in February, decided not to refer a case against Group Five to the tribunal in relation to the Sendzimir cold rolling mill project, owing to a lack of evidence.
One case against Group Five was still the subject of an investigation by the commission and may or may not be referred to the tribunal.