Companies involved in a mining roof bolts cartel are being brought to book by the Competition Commission, starting with leading infrastructure organisation Aveng Group Africa, which has agreed to pay a fine of almost R22-million.
The cartel was uncovered in September last year by the commission. Three other companies, RSC Ekusasa Mining (RCS), Dywidag-Systems International (DSI) and Videx Wire Products (Videx) were also found to be involved.
RSC has been granted immunity after admitting to its involvement and applying for leniency. Aveng — trading as Duraset — attempted to apply for the same leniency but the request was rejected and it soon decided to settle.
The remaining two respondents, DSI and Videx, have not made any settlement proposals to the Competition Commission as yet. “The matter has been referred to the tribunal,” Oupa Bodibe, the manager of advocacy and stakeholder relations at the commission, told the Mail & Guardian. He said the papers were filed on Tuesday and that a date has not yet been set.
The R21,9-million to be paid by Aveng represents 5% of the company’s annual turnover. This settlement was reached after the commission’s referral of its findings against the four companies. The Competition Commission said “the tribunal for adjudication — asked the tribunal to levy an administrative penalty of 10% on the annual turnover of three of the firms”.
Aveng told the M&G that it had identified the Steeledale unit of the group as involved in compromising conduct and the matter has been set down for a hearing of evidence and argument in November this year.
“This fine [of 5%] was agreed between the company and the Competition Commission as being an appropriate penalty in this matter.”
The commission said its investigation had found the cartel to have begun in the 1990s. It was resurrected in 2002 when “DSI entered the market with prices considered by its competitors as ‘exceptionally low and unsustainable’. This resulted in a price war.”
The companies eventually agreed not to sell to each other’s customers and each was allocated 25% of the market.
The members had agreements to apportion customers and products and to work together on tenders.
“Once the tribunal confirms the settlement, the case will be considered finalised between Aveng and ourselves,” Bodibe said.
“The Aveng group board has zero tolerance for unethical behaviour,” the company said in a statement released to the M&G.
“The group has implemented, and continues to implement, a range of measures — from an independently run anonymous tip-off line to group-wide anti-corruption and competition law policies and training — to ensure that ethical and legal business practices are maintained throughout its operations.”
On whether the other respondents would not pay the proposed 10% fee of their annual turnover, Bodibe said that each case will be individually assessed. “Several factors are taken into account when looking at any settlements.”