Group Five collusion cases to set precedent

GROUP Five believes the outcome of its discussions with the Competition Commission on two unresolved collusion cases implicating the listed construction and engineering group were important because the outcome would set a precedent.

Cristina Teixeira, the financial director at Group Five, said yesterday that the company’s management team and board were very aware that it would be in the interests of all stakeholders to ensure that all of the Competition Commission matters within Group Five were addressed and closed.

Teixeira stressed that Group Five certainly had the intent to resolve them and was continually engaging with the commission to do so on fair terms and some progress had been made.

The commission in March last year confirmed it had referred a case against Group Five related to alleged collusive tendering on a SA National Roads Agency Limited (Sanral) contract to the Competition Tribunal for prosecution and was pushing for the maximum penalty of 10 percent of Group Five’s annual turnover.

Eric Vemer, the group chief executive of Group Five, said yesterday the company believed it was well placed to defend this potential R7million claim.

Vemer said a date had not yet been set for this case to be heard by the tribunal.

The commission alleged there was collusive tendering between Group Five, Wilson Bailey Holmes-Ovcon (WBHO) Construction and Concor, a subsidiary of Murray and Roberts (M&R), on a tender for the rehabilitation of National Route 5, section 4 between Senekal and Vaalpenspruit in the Free State.

This was one of four projects that Group Five was implicated that were not protected by immunity and were not settled during the commission’s fast-track settlement process launched in 2011, two of which were subsequently dropped. During the fast-track settlement process Group Five declared 25 rigged projects and was granted provisional corporate leniency for all of these projects.

The other outstanding case against Group Five relates to alleged collusive tendering with WBHO, M&R, Stefanutti Stocks and Basil Read for the construction of the World Cup stadiums in 2010.

Settlement Teixeira said the tribunal process related to the Sanral contract was continuing.

“The reason why this is important is because we believe that the outcome of these matters will set a precedent not only for the industry but the market as a whole.

“For that reason, it’s important for both parties that the process is conducted in the most appropriate manner.”

Teixeira stressed that the group maintained a co-operative stance with the Competition Commission and the authorities to conclude this matter.

She said the group had looked at its provision and had left it unchanged from the provision previously arranged following discussion with senior counsel.The share price of Group Five increased 2.22percent to close at R24.42.