CA scarred by dismissed tender rigging cases

Competition Authority case.PIC.KENNEDY RAMOKONE
Competition Authority case.PIC.KENNEDY RAMOKONE

The recent dismissals of two bid-rigging cases that the Competition Authority (CA) had referred to the Competition Commission for adjudication might have come as a bitter blow to the competition watchdog.

Available data shows that since its establishment in 2011, the authority has investigated nine anti-competitive cases, which were later referred to the commission. Out of these, the authority won three and withdrew five cases, while two have been lost.

One of the cases that were lost involved two food-supplying companies – Creative Business Solutions and Rabbit Group – that were accused of dividing a tender amongst themselves and colluding to fix prices, in contravention of the Competition Act. The Competition Authority lost the case on technicalities.

It was established that the commission had no jurisdiction to hear the matter since the CA had filed the case after the prescribed date. The other reason was that a person with no authority to file to the commission had done so.

The other case, which was dismissed in September 2013, was of a company called Raheem Investments which had been brought before the commission on allegations of bid-rigging in a multi-million tender for the supply of goods to government schools.

Although the accused company had confessed to colluding with an employee of a competitor to rig a P30 million government tender, it escaped punishment after the commission dismissed the case for lack of evidence.

Legal experts argue that the Competition Authority should not have lost these cases for the reasons that were advanced.

Attorney Kgotso Botlhole of Monthe Marumo & Company asserted that CA must always be mindful of the imperative strictures of the Competition Act.

He added that the authority lost the case on technicalities due to the fact that the express provision exists in the very Act that creates the Competition Authority itself.

“It is reasonably expected that unless there is a reasonable explanation, the Competition Authority must appreciate that it will be held legally accountable for non-compliance with provisions of the Competition Act,” he warned.

Botlhole indicated that the authority had been granted tremendous power by the Act to discharge its statutory mandate as a guardian of public interest. He said the resultant effect of this is that it is equally enjoined to conduct its work with the requisite statutory sensitivity and diligence.

“It does not augur well with the aforesaid principles for the authority to conduct investigations and not refer the matter for adjudication within the stipulated time frame, or alternatively not seek extension should it reasonably foresee that it would not be in a position to make a referral within a year,” he said.

Botlhole pointed out that the Competition Act imposes an obligation on the Competition Authority that it shall be responsible for the prevention of, and redress for, anti-competitive practices in the economy, and the removal of constraints on the free play of competition in the market.

“Notwithstanding the above, one would not expect the Competition Authority to be entangled by such a technicality that it did not refer the matter within one year after an investigation is opened,” he said. 

Director of Legal and Enforcement, Duncan Morotsi had argued that the CA has won more cases than it has lost. He also stated that investigations were completed in the nine cases that were referred to the commission, adding that the other complaints did not have any competition issues in them and many more cases are still under investigation.

Morotsi explained that the authority uses in-house lawyers while at times it outsources legal services. He gave an example of the sugar beans case stating that it had been earlier on appealed and withdrawn by the applicants.

“We are currently appealing the present ruling. On appeal, just like at the tribunal stage we engage counsel from outside if there is a need to do so,” he said.

Grilled on whether there is a thin line between the Competition Authority and the Competition Commission, Morotsi said there is a jurisdictional ruling on this point, which clarifies the separation between the commission and the authority.

He noted that the government has approved a request to separate the two organisations, to create a separate tribunal and a board.

Under the current Competition Act, the CA investigates and prosecutes cases of anti-competitive behaviour before passing them on to the commission for adjudication.

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