Two members of fire cartel pay penalties
TWO OF the seven fire companies that were being prosecuted by the Competition Commission for engaging in cartel conduct have each agreed to pay hundreds of thousands of rands in penalties and to help the commission to prosecute the remaining members of the cartel.
Sipho Ngwema, the head of communications at the commission, said yesterday that Fireco Gauteng and Afrion admitted to engaging in price fixing, market division and collusive tendering, in contravention of the Competition Act.
Fireco Gauteng has agreed to pay a fine of R909 000 and Afrion a R327 000 penalty, he said. Both companies specialise in supplying, installing and maintaining fire-control and protection systems in South Africa and elsewhere in Africa.
Ngema said the companies had fixed prices, divided markets and tendered collusively when bidding for tenders to install fire-control and protection systems in new and existing buildings.
He said the agreement with the two companies was a significant breakthrough in the prosecution of the other members of the cartel.
The two companies were among several fire-control and protection systems companies that were referred by the commission to the Competition Tribunal for prosecution in March. The other companies that were allegedly part of the cartel were Belfa, Cross Fire, Fire Protection Systems, Fireco and Tshwane Fire Sprinklers.
The settlement agreement follows commission investigators in March 2015 conducting dawn search-and-seizure raids at the premises of Belfa Fire, CrossFire Management, Fire Control Systems, QD Air, Technological Fire Innovations and Fireco.
The commission’s investigation found that, from at least 1996 until 2015, the companies entered into an agreement and/ or engaged in a concerted practice to fix prices, divide markets and act collusively in relation to tenders to install fire-control and protection systems in new and existing buildings.
The commission further alleged that the companies concluded bilateral and multilateral collusive agreements, which were implemented by exchanging cover quotes, sharing bills of quantities and exchanging prices via telephone, fax, e-mail and occasional meetings.
The companies had also agreed to “respect” each other’s allocated customers, by not bidding competitively for tenders issued by those customers, the commission said.