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In 2013 news of a major scandal in the construction sector broke, with 15 firms implicated in extensive collusion in Fifa World Cup projects. Corruption Watch was involved in the case, making a submission to the Competition Tribunal which called for those who were affected by the illegal activity to pursue civil claims against the offenders.
Of the 15 firms, three did not accept a settlement agreement and one of these – Group Five – is currently embroiled in another collusion scandal that was not disclosed along with the world cup revelations.
The Competition Commission, which opened the case, alleged that with two other firms – Murray & Roberts (M&R) and WBHO – Group Five conspired to rig a tender for a Sanral project in the Free State. This took place in 2006, before the football tournament and in an area unaffected by it. The commission has asked the Competition Tribunal for a fine equivalent to 10% of Group Five’s annual group turnover.
The so-called Senekal project was aimed at rehabilitating the national route 5, section 4 between Senekal and Vaalpensspruit, in the eastern Free State. The commission’s case was based on allegations that WBHO and Concor – a subsidiary of M&R – entered into an agreement with Group Five, where the three colluded to ensure that Group Five won the tender by submitting the lowest bid.
As the whistleblower, WBHO received conditional leniency from the commission, while M&R entered into a settlement agreement in 2013, which included a fine of R309-million. Group Five – which was the whistleblower in the world cup saga – had not filed a response to the allegations, saying that it was entitled to see the commission’s investigation record on the matter. The firm made an application to this effect, but the commission argued that only once the pleadings have been entered would the documentation be made available.
The tribunal dismissed Group Five’s application on 18 January 2016, and gave it 20 business days in which to enter a plea. That deadline has now passed.
Meanwhile, the commission had submitted a separate application to the tribunal for a default judgment as Group Five had not yet filed an answering affidavit to the charges against it, and the period for doing so had lapsed. The tribunal dismissed this application and gave Group Five the 20-day period within which to plead. Only after this period has elapsed with no plea being submitted, would the tribunal consider a default judgment.
We have contacted both the commission and the tribunal to find out if Group Five has entered a plea, but at the time of publishing we had not yet received a response.
Update: The Competition Tribunal has informed us that Group Five has appealed the tribunal’s dismissal to the Competition Appeal Court. The company has 40 business days within which to file its records, on receipt of which the court will issue a hearing date. Group Five is digging in its heels.
