The Competition Tribunal on Wednesday confirmed a consent agreement with Motseng Investment Holdings to pay a R200 000 penalty with its now-closed subsidiary Motseng Trading, for the subsidiary’s involvement in the bid rigging of tenders issued by the National Treasury and the Armaments Corporation of South Africa (Armscor).
The tenders were for the supply of fabric used to manufacture uniforms for the Department of Correctional Services, the South African Air Force, Military Health Services and the Army.
Motseng Trading, which closed down in March 2015, was found to have colluded with Good Hope Textile Corporation, trading as Da Gama Textiles, and Monoge Mining Contractors, in relation to the tenders issued by the Treasury and Armscor.
According to the complaint by the Competition Commission, Da Gama, Motseng Trading and Monoge Mining exchanged information with each other regarding their bids and then agreed on the prices they would quote in their bid submissions.
Motseng Trading, which was a small company without manufacturing capability, sourced its fabrics from Da Gama, and admitted that it contravened section 4(1)(b)(iii) of the Competition Act.
Da Gama Textiles previously agreed to pay a R2.1-million fine for its role in the bid rigging.
The penalty to be paid by Motseng Investment Holdings amounts to 3.2% of Motseng Trading’s yearly turnover for the 2015 financial year.
The commission said Motseng Trading had cooperated with the investigation and has ceased the relationship with Da Gama as soon as it realised it was under investigation.
The matter involving Monoge Mining is yet to be concluded.