Amsteele agrees to settlement and a R2.8m fine
A SETTLEMENT agreement between the Competition Commission and Amsteele Systems related to collusive tendering, price fixing and the fixing of trading conditions for the supply of post-tensioning steel was confirmed by the Competition Tribunal yesterday.
Amsteele Systems has in terms of the settlement agreed to pay a fine of R2.8 million and made a number of commitments in terms of the firm’s future conduct.
The fine is equivalent to 7 percent of the turnover derived by Amsteele from the manufacture and supply of post-tensioning steel in the financial year to March 2011.
The settlement agreement entered into between the commission and Amsteele follows the commission in April 2010 initiating a complaint against the firm and Tsala-RMS Construction Solutions, Freyssinet Posten, Steelforce Systems and the SA Post Tensioning Association (Sapta) for their involvement in fixing prices and allocating tenders for the supply of post-tensioning steel in contravention of the Competition Act.
The commission’s complaint was initiated after it received a corporate leniency application from Tsala-RMS in January 2010.
Amsteele approached the commission with a view to reaching a settlement when it became (aware) of the commission’s complaint against the company.
The commission’s investigation found that Amsteele had, between June 2006 and December 2008, reached and implemented an overarching agreement involving a division of markets by allocating customers, collusive tendering, indirectly agreeing with competitors Tsala-RMS Construction Solutions, Freyssinet Posten and Steelforce Systems on industry trading terms and conditions in respect of applicable price adjustment formula for post-tensioning contracts in contravention of the Competition Act.
The arrangement was reached by participating in meetings and discussions with its competitors under the auspices of Sapta. The price adjustment formula proportioned the mix of labour and materials applicable to the post-tensioning industry and applied specific indices available from Statistics SA.
Amsteele admitted to these contraventions but was unable to provide the details of all construction projects involved. It did provide a list, to the firm’s “best recollection”, of the affected projects. The list contains 60 tenders, some of which were not awarded.
They included separate tenders for floor slabs at the King Shaka Airport and a vehicle bridge at the airport, an Airports Company South Africa tender for floor slabs for a multi-storey car parkade, a vehicle bridge for the New England road interchange in Pietermaritzburg and tenders for various shopping malls.
Layne Quilliam, the legal counsel for the commission, told the tribunal yesterday that the settlement agreement would be in full and final settlement of the contraventions, even if further information became available to the commission about other projects that were not on the list.
Quilliam said the commission had been unable to get certainty on the projects involved despite the best efforts of the parties because the conduct took place a long time ago and due to the turnover of staff and unavailability of documents.
Neil Mackenzie, the legal representative for Amsteele, added that the list of projects was simply an indicator of the extent of the contraventions and the best the parties could come up with based on what information was available.
Quilliam said Freyssinet was currently in negotiations with the commission to settle the allegations against the firm, but the commission had been informed that Steelforce was in the process of being liquidated.
He said the commission had made contact with Sapta, which was amenable to settling the complaint but was waiting for the outcome of the complaints against all the individual members of the association before it would finally conclude a settlement agreement.
The agreement… related to collusive tendering, price fixing and the fixing of trading conditions.