Commission in massive raid on fire control entities
THE COMPETITION Commission launched its largest simultaneous and co-ordinated search and seizure raid in a cartel investigation in its history on Wednesday when its investigators swooped on the premises of the Automatic Sprinkler Inspection Bureau (Asib) and 24 fire control and protection services companies that are members of Asib.
Sipho Ngwema, the head of communications at the commission, said yesterday that the companies raided were involved in the supply, installation and maintenance of fire control and protection systems.
Chubb Fire and Security KwaZulu-Natal was the most high profile company on the list of companies that were raided.
Ngwema said the commission had reasonable grounds to believe that Asib and its members had agreements and/ or were engaged in a concerted practice to fix prices and trading conditions, divide markets and tender collusively.
He said the raids formed part of an ongoing investigation and prosecution in the sector, which had already led to several Gauteng companies admitting to the conduct and settling with the commission.
“This investigation is particularly concerning, because of the seemingly prominent role played by consulting engineering companies in facilitating in KwaZulu-Natal; East London and Port Elizabeth in the Eastern Cape; and Houghton in Gauteng.
Ngwema said Asib members were allegedly required to adhere to various rules and standards which constituted an agreement to exclude non members from the market who use legally prescribed and acceptable standards in the country. This standard was the South African National Standards developed by the SA Bureau of Standards.
Ngwema said the Asib rules and standards, among other things, allegedly involved reserving the installation of the fire control and protection equipment for Asib members only; reserving the inspection of installed fire control and protection systems in the industry for Asib members; and prohibiting Asib members from subcontracting work to non members.
Asib members were also allegedly discouraged from operating in regions where they were not registered and Asib refused to provide clearance to any installations that had not been carried out by its listed members. Asib allegedly also listed companies as approved suppliers of pipes, pumps and sprinklers. Installers not registered with Asib got no supplies.
Asib further allegedly divided installers into different categories, thereby restricting competition among installers of fire control and protection systems, he said.