Construction firm Wilson Bayly Holmes-Ovcon (WBHO) CEO Louwtjie Nel on Thursday said the company accepts responsibility for its actions with regard to collusive tendering, but emphasised that this was something of the past.
He was speaking during Competition Tribunal hearings in Pretoria where the Competition Commission and 15 major construction firms were seeking confirmation of a collective fine of R1.46-billion imposed on the companies by the commission for “rampant” collusive tendering related to projects concluded between 2006 and 2011.
These penalties were the result of the Construction Fast-Track Settlement Process, initiated by the commission in February 2011, in terms of which firms were incentivised to make a full and truthful disclosure of bid-rigging in return for penalties lower than what would be sought by the commission should it pursue legal action.
WBHO was among those companies that incurred the largest penalties for collusive practices, having to pay R311.29-million for 11 projects.
“The last contravention took place five years ago. WBHO has engaged in competition compliance training and we are confident that contraventions will not be repeated,” he stated, adding that a self-certification system had also been put in place to rid the firm of uncompetitive behaviour.
He admitted that ‘loser fees’ for firms that agreed to submit bids that would allow the firm to win a tender had been paid in three of the eleven disclosed instances, including the N17 link and the Durban International Convention Centre.
Nel said the fees paid had slipped under the radar because “it was a busy time, with a lot of payments made”.
He also noted that WBHO was in the process of seeking legal advice on how to prosecute employees who were involved in the collusive conduct.
Also among the top contraveners was Murray & Roberts, which was fined R309.05-million for 17 projects.
The firm would pay its R309-million settlement in three instalments; R103-million would be payable one month after the tribunal confirmed the settlement, R103-million after 12 months and R103-million after 24 months.
Since disclosure, the firm had also instituted internal processes to prevent future anticompetitive behaviour, which included yearly compliance declarations by all executives, as well as compliance declarations with each tender submitted.
“The collusive conduct was never known by or endorsed by our board. It came about by the unauthorised actions of certain subsidiary directors,” the company’s legal representative Derek Lotter said.
He pointed out that about half of the contraventions took place before the company bought two other construction companies, adding that this was the “bleakest moment” in the company’s history.
Lotter said the company planned to take legal action against directors implicated in unethical conduct.
Similarity, Stefanutti Stocks CFO Dermot Quinn noted that the firm inherited eight contraventions from Stocks and Stocks Construction, which it acquired in 2008, while admitting that R50 000 in ‘loser fees’ had been paid between 2006 and 2011.
The firm’s total administrative penalty was R306.89-million for 21 projects.
Quinn said the firm had engaged with the National Prosecuting Authority whose investigation was ongoing, and that the board, therefore, felt it was not appropriate to take a decision regarding treatment of those involved.
In his statement to the tribunal regarding the confirmation of the collective fine, Basil Read deputy CEO Donny Gouveia said the group wanted to close “this dreadful chapter in our history".
Basil Read had to dock up R94.94-million for seven projects.
Tribunal chairperson Norman Manoim said a ruling on the confirmation of the collective fine would be made in the next few days.