16 May 2010 by

Tribunal confirms settlement agreements between firms in the precast concrete market and the Commission

In December 2007, Rocla applied for leniency regarding its involvement in a cartel in the precast concrete market. Following this, the Commission initiated an investigation and concluded that Rocla, Southern Pipeline Contractors, Concrete Units, Infraset, Grallio, Cobro, Cape Concrete, Concrite Walls, Craig Concrete and DD had engaged in cartel activity by fixing the selling price of pipes, culverts and manholes, dividing the markets for the production and distribution of these products and also engaged in collusive tendering in respect of the supply of precast concrete sleepers. 

Cobro and Concrete Units each entered into settlement agreements with the Commission. Cobro admitted guilt and agreed to pay a penalty of R4,022,568.29 being 6.5% of its turnover for the financial year ending 2008. Concrete Units argued that its conduct ended in September 2007 and as such agreed that for the contraventions up to September 2007, it would pay an administrative fine in the amount of R5 763 743.00 being 7% of its turnover for the financial year ended 2008.

Concrete Units also agreed to refrain from engaging in any cartel activity in relation to the manufacture and sale of precast concrete pipes and culverts. Furthermore, Concrete Units agreed to furnish all its present directors and any future director (appointed in the next five years) with a copy of the settlement agreement and in each case draw the director's attention to the contents of the settlement agreement.

The other conditions of the settlement agreements were largely similar in that Cobro and Concrete Units agreed to co-operate fully with the Commission in its prosecution of any other firm arising from the Commission's investigation of the complaint. In addition, they each agreed to develop and implement (within six months of the settlement agreements) a compliance programme designed to ensure that employees, management and directors do not engage in any price fixing, market division or collusive tendering.

The Tribunal confirmed both settlement agreements.

Chris Charter, Director, Competition
Scarlate Nkiwane, Associate, Competition

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