‘Stefanutti, commission have a consent agreement’
A CONSENT agreement between listed construction group Stefanutti Stocks and the Competition Commission, relating to collusive tendering on a Rainbow Farms building tender and Lanxess groundwater remedial project, was confirmed by the Competition Tribunal yesterday.
Layne Quilliam, the legal counsel for the commission, said in terms of the provisions of the agreement, the commission was not seeking a penalty against Stefanutti because the company was granted immunity in terms of its corporate leniency policy in relation to collusive conduct on the projects.
The tribunal heard that Stefanutti had agreed in December 2005 to pay a loser’s fee to Inhlanhla Civils, trading as Civil Engineering & Build CC, in the event that Stefanutti won the Rainbow Farms building tender.
Quilliam said Stefanutti won the tender and in accordance with the agreement paid the loser’s fee of about R56 000 to Inhlanhla Civils.
The tribunal heard that in June 2006 Stefanutti, which was then called Stefanutti & Bressan, had agreed to submit a higher tender for the Lanxess groundwater remedial project to ensure that listed Esorfranki was awarded the tender.
Loser’s fees
Quilliam said Esorfranki in return would pay Stefanutti a loser’s fee of about R1 million.
He said Esorfranki was awarded the tender in line with the agreement and a loser’s fee had been paid to Stefanutti.
Esorfranki was fined R155 850 under the commission’s fast-track settlement process for the cover pricing agreement reached with Stefanutti on this project in terms of a consent agreement confirmed by the tribunal in July 2013.
Quilliam added that the commission found during the investigation of the Rainbow Farms building tender that Inhlanhla Civils had been liquidated and decided not to pursue or prosecute the company.
He said the commission had brought Stefanutti before the tribunal as the leniency applicant and the only other respondents in these two projects to have collusive conduct, for which it had received leniency confirmed as a contravention of the Competition Act.
“The effect of this confirmation, if it should be given, will finalise the commission’s cases against Stefanutti and give certainty to Stefanutti of final immunity in terms of the corporate leniency policy. The added benefit is that third parties will also have confirmation through the tribunal’s order of Stefanutti’s conduct as a contravention,” he said.
Quilliam added that despite Stefanutti not facing any fine in terms of the consent agreement, the company had implemented a competition compliance programme.
Norman Manoim, the chairman of the tribunal, asked why there was such a large difference between the loser’s fees paid on the two projects and what had happened to the R1m paid to Stefanutti by Esorfranki.
Martin Versfeld, the legal representative for Stefanutti Stocks, said the size of the loser’s fee reflected the difference in the magnitude of the projects, adding that the loser’s fee was intended to contribute towards the cost of the company preparing and submitting a bid.