Court gives Group Five breathing space
Firm says it was granted immunity
Embattled construction and engineering company Group Five is breathing a sigh of relief after the Constitutional Court dismissed the Competition Commission’s bid to appeal a ruling by a lower court that the watchdog could not charge the company for being part of a construction cartel that rigged tenders for the construction the Fifa 2010 World Cup stadia.
The apex court decision confirmed the earlier ruling delivered by Supreme Court of Appeals (SCA). The matter has been dragging on for nearly a decade.
It started in 2009 when the commission initiated a complaint following suspicions of collusion against various construction companies, including Group Five, into the firm’s conduct relating to the construction in South Africa of the Fifa 2010 World Cup stadia.
The commission decided to investigate possible collusive conduct between various companies and Group Five then sought to take advantage of the commission’s corporate leniency policy by providing information that would assist to uncover the prohibited practices.
Group Five alleged the commission gave it an unequivocal undertaking to grant it immunity, but later reneged when in 2014 referred a complaint against Group Five and other construction companies for contravening sections of the Act to the Competition Tribunal and sought a 10% administrative penalty against Group Five.
Most of the companies played ball back in 2011.
Aveng, Murray & Roberts, WBHO and Stefanutti reportedly coughed up more than R300-million each and Basil Read paid R95-million.
But Group Five insisted the commission had granted it immunity. It then successfully approached the high court seeking to review and set aside the initiation and the referral of the complaint to the tribunal on the basis that the referral and ordering of penalties was precluded by the commission’s grant of immunity to it.
The high court agreed. The commission then approached the SCA, but its appeal was dismissed - a decision the apex court has now agreed with.
Group Five, which has lost its former glory in the past few years is currently on the ropes after its creditors in 2019 voted in favour of a business rescue plan presented by practitioners overseeing the process.