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New court fight looms for construction cartel

New court fight looms for construction cartel

At least three firms implicated in bid-rigging relating to the building of 2010 World Cup stadiums are set to fight fresh charges brought by the Competition Commission against them this week.

Group Five, Stefanutti Stocks, WBHO and Basil Read are among the companies that are being pursued in a separate matter from the one that saw the Competition Tribunal imposing a collective R1.4bn penalty against the firms in question.

While these four have settled some matters with the commission during the fast-track process that resulted in the fine, the commission believes the companies have a case to answer in relation to other allegations of bid-rigging, collusion and the manipulation of tenders.

They were the major benefactors of the building contracts for the stadiums, a process proven by the cartel investigation and the companies’ admission during the first phase of the process to have been beset with tender manipulation.

The stadiums that were subject to the collusive practices were FNB, Peter Mokaba in Polokwane, Moses Mabhida in Durban, the Cape Town, Mbombela in Nelspruit, and Nelson Mandela Bay in the Eastern Cape. The contracts for these, according to the commission, amounted to more than R10bn.

The basis for the commission’s new charges against the three firms are that two meetings to discuss building of the stadiums which allegedly occurred shortly after the Local Organising Committee invited the firms, which along with Aveng and Grinaker, have a monopoly in the construction sector.

Following the meeting, top executives of the construction firms held their own meetings in Sandton at the offices of WBHO, where it was agreed to split the tenders among each using “cover pricing."

The first meeting was attended by then WBHO chief executive Mike Wylie, then managing director of the building division of WBHO, Louwtjie Nel, then senior estimator at Murray & Roberts, Phillip Taylor, and Schalk Ackerman, who was at the time the managing director of the civils division of Aveng.

Others at the meeting were Concor’s managing director for the civils division at the time, Trevor Robinson, then Group Five chief Mike Lomas and Basil Read COO Kobus von Biljon.

But the companies, that declined to enter into settlement with the commission during the first phase are maintaining their innocence from the collusion allegations.

Stefanutti Stocks chief executive Willie Myburgh said the company has settled all relevant issues with the commission, and accused it of issuing a generic statement this week when it announced its intention to pursue further charges against the firms.

Basil Read chief executive Neville Nicolau also denied the company was guilty of any collusive practices during the bidding process for the stadiums.

Group Five said it had anticipated the commission’s last charges for a while and was looking forward “to now fully addressing the issues surrounding its involvement in the World Cup in light of the formal referral process."


Source: iol 

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