Competition Tribunal confirms Aveng deal

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Murray & Roberts, Wilson Bayly Holmes-Ovcon, Group Five, Stefanutti Stocks, Raubex, Basil Read and Aveng agreed to pay annual dues over 12 years into a trust governed by trustees appointed by the government. Murray & Roberts, Wilson Bayly Holmes-Ovcon, Group Five, Stefanutti Stocks, Raubex, Basil Read and Aveng agreed to pay annual dues over 12 years into a trust governed by trustees appointed by the government.

Competition Tribunal on Wednesday confirmed an immunity agreement between JSE-listed construction group Aveng struck with the Competition Commission.

Layne Quilliam, counsel for the commission, said at a tribunal hearing that the purpose of the consent agreement and application was to confirm the collusive conduct of Aveng as a contravention of the Competition Act to allow third parties to seek civil damages.

Quilliam said the commission was not seeking a penalty in this application because Aveng had been granted conditional immunity in terms of the commission’s corporate leniency policy.

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He said the collusive conduct that formed the subject of this consent agreement related to 10 construction matters that Aveng informed the commission of in terms of the fast-track settlement process.

Quilliam said Aveng was also the leniency applicant for the 2011 complaint related to the Transnet Railway Maintenance tenders.

He said the consent agreement was based on two complaints, the first involving the September 2009 complaint initiated by the commissioner against pervasive collusive conduct in the construction industry.

Aveng was cited in this complaint and it included collusive tendering through the exchange of prices, he said.

The commission has been cracking down on collusion across many sectors, with Economic Development Minister Ebrahim Patel increasingly taking a hard line on companies.

Several state entities including the City of Cape Town, have threatened civil action against construction companies accused of collusion.

Seven of SA’s major construction and engineering companies agreed last week to participate in a R1.5bn “voluntary” settlement agreement to allay competition penalties and speed up transformation in the sector.

Murray & Roberts, Wilson Bayly Holmes-Ovcon, Group Five, Stefanutti Stocks, Raubex, Basil Read and Aveng agreed to pay annual dues over 12 years into a trust governed by trustees appointed by the government, the construction companies and the South African Forum of Civil Engineering Contractors.

The R1.5bn agreement with the state is in addition to the R1.46bn already levied on 15 construction firms for collusion.

Aveng spokeswoman Sorita van Tonder said on Wednesday: “Aveng confirms it has signed a consent agreement with the Competition Commission, which relates to the historical projects for which it was the immunity applicant in 2013.

“No relief is sought against Aveng and the company will not incur penalties. Aveng has processes ... to ensure that this type of behaviour is never again associated with the Aveng brand.”

The tribunal said Aveng was the first company to apply for immunity when the commission launched its fast-track project in February 2011 and had concluded an agreement with the commission over various projects.

The projects included water works, a mining crushing project, processing plant project and export railway line, a block of flats in Mossel Bay, rehabilitation of a national road in the Eastern Cape and Transnet railway maintenance tenders.

“The fast-track process by the commission gave companies in the construction industry an opportunity to settle with the commission on favourable terms,” the tribunal said.

“In return for conditional immunity, Aveng disclosed its participation in collusive tendering in a number of projects between 2004 and 2007.

“The Competition Commission now confirms that Aveng has complied with the requirements set out in the leniency policy,” it said.

Group Five was also among the first construction companies to approach the Competition Commission.

Aveng shares fell 2.64 percent on the JSE yesterday to close at R7.

Read more on:

Murray & Roberts  |  Group Five  |  Basil Read  |  WBHO  |  Aveng  |  Stefanutti Stocks  |  Raubex  |  Layne Quilliam
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