NPA, Competition Commission investigations two separate matters, says Group Five CEO

13th February 2013

By: Irma Venter

Creamer Media Senior Deputy Editor

  

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Construction company Group Five was not being investigated by the National Prosecution Authority (NPA) for any anticompetitive behaviour, said Group Five CEO Mike Upton on Wednesday as he announced the construction company’s interim financial results in Johannesburg.

The media had been awash with reports in recent weeks of a NPA investigation into price-fixing and collusion in the local construction industry.

Speaking to Engineering News Online, Upton said Group Five had “had engagements” with the Competition Commission, which had been leading a long-standing probe into collusion in South Africa’s construction industry, since the media reports first surfaced. The Competition Commission had indicated that its investigation was continuing, “proceeding to its natural conclusion”.

However, there now existed “distortion” between the anticompetitive investigation by the commission into the industry, and the criminal probe by the NPA.

“These two things are being mushed together, but they should not be mushed together. They are separate investigations.”

Upton said recent media reports had “confused the market”.

He reiterated that Group Five was not being investigated by the NPA.

The company’s participation in the Competition Commission investigation, however, can be traced back to 2009.

The Competition Commission had announced its intention to investigate the construction industry for anticompetitive behaviour in 2008.

Group Five realised that it would be at risk in this investigation owing to “historic industry practices”, said Upton.

In 2009, the company undertook an internal investigation, during which time staff came forward to make disclosures to protect the group’s position, he added.

Group Five was the first major construction company to approach the Competition Commission to apply for leniency, given in return for information. This was provided, pending conclusion of the full industry investigation.

From 2010 to 2012, Group Five provided the commission with information to support its disclosures.

In 2011, the Competition Commission announced a “fast-track settlement” process for companies that had been party to collusive practices.

However, this did not include Group Five. Group Five on Wednesday was still in a position where it had no need to make financial provision for a fine from the Commission, owing to its cooperation and position as leniency applicant, said Upton.

He warned, though, that there was no “guarantee of zero fines” until the Competition Commission completed its investigation.

“Management regrets the past behaviour in this industry,” said Upton. “We trust that our early actions from 2008 have contributed to a changed industry.”

Edited by Creamer Media Reporter

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