Another bid-rigging case dismissed on technicalities

Duncan Morotsi
Duncan Morotsi

In yet another blow to the Competition Authority (CA), the Competition Commission, the adjudicating body, has dismissed a multi-million pula bid-rigging case involving two food-supplying companies on technical grounds.

The companies, Creative Business Solutions trading as Bread and Butter Foods and Rabbit Group, were accused of having connived to rig a €139,600 (P20.7 million) tender for the supply of 1.5 million units of infant formula in 400 gramme cans to the Department of HIV/AIDS Prevention and Cure in the Ministry of Health.

The competition watchdog acted on a tip-off from a whistleblower who alleged that the two companies had rigged the tender.  A year-long investigation was subsequently initiated and was, with the authority of the commission, further extended by six months.  In a judgment passed this week, the commission admitted that it had erred in granting an extension of the investigations as the authority had filed the application a day after the stipulated one-year timeframe allowed by the act.

In a decision handed down on Tuesday, presiding member of the commission, Tendekani Malebeswa, concluded that the CA had no jurisdiction to file an application with the Commission on August 26, 2014 as the one-year period for investigation had lapsed on August 25, 2014.

The act stipulates that the authority should investigate a case for a maximum of a year before handing it over to the Commission for adjudication. 

The authority is, however, allowed to apply for an extension of the investigations provided the application is lodged before the period lapses.    “Consequently, the commission also had no jurisdiction to hear the application and extend the period of investigation.

Therefore, there has been a non-referral,” he said.

The commissioner then dismissed the case, a decision that was endorsed by other commissioners who included Gaylard Kombani, Dr Jay Salkin, Dr Selinah Peters, Thembisile Phuthego and Nelly Senegelo.

Three months ago, the Commission dismissed, also on technicalities, a case in which the same companies were implicated in another P114 million tender bid-rigging involving the supply of sugar beans to schools across the country.

After passing of the judgment, the authority indicated that it intends to appeal the ruling at the High Court.

The authority’s lawyer, Duncan Morotsi told BusinessWeek yesterday that they want to consolidate the appeals at the court, stating that they have a chance of succeeding.

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