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CA loses P114m bid-rigging case again

The Competition Authority (CA) has lost with costs a Court of Appeal case in which two food-supplying companies were accused of colluding to fix prices in a multi-million-pula tender for the supply of sugar beans to schools across the country.

The companies, Creative Business Solutions, trading as Bread & Butter Foods and Rabbit Group, were said to have colluded to divide tenders worth a combined P114 million amongst themselves.

The companies were also accused of having conspired to fix prices, in contravention of section 25(b) and (c) of the Competition Act. The Authority had acted on a tip-off from an informer alleging that the companies, in response to the tenders, had colluded in terms of pricing. The tender was for the supply of 7,530 metric tonnes of sugar beans to the Ministry of Local Government.

Bread & Butter Foods was awarded tenders for Palapye, Selebi-Phikwe, Francistown and Maun areas, at a total value of P58.1 million, while Rabbit Group was awarded tenders for Lobatse, Gaborone and Mahalapye areas valued at P55.9 million. In July 2014, the Authority started proceedings against the two companies before the Competition Commission on the basis that they were guilty of bid-rigging and market sharing, both of which are a violation of the Competition Act. Apart from dealing with the merits of the charges against them, the companies raised several technical objections on several occasions before the Commission.

One of the objections raised by the companies was that the charges against them were time-barred in that they were referred to the commission more than one year after the investigations by the Authority had started. This objection was upheld by the Commission, which led to the summarily termination of the charges against the companies. The appeal to the High Court against

that decision was dismissed with costs.

The Authority then sought leave to launch a further appeal with the Court of Appeal

The recent appeal came as a result of the High Court judgement in which the court had dismissed an appeal by the CA with costs.

The Authority, through its attorneys, Abel Modimo and Thato Rasetshwane, had sought the Court of Appeal to reverse the High Court judgement that it had lost with costs. The Authority contended that both the Commission and the High Court had erred in finding that the charges against the two companies were time-barred, in that its investigation into the matter started on July 25, 2013, which was less than one year before the referral on July 23, 2014.

 However, Justice of appeal, Jacobus Brand, maintained that the proposition by the CA that it only started its investigation when it issued the notice to investigate cannot be sustained.

He said the High Court was correct in its finding that the clock started ticking on November 21, 2012 when the Authority invoked its powers by demanding information from the Public Procurement and Asset Disposal Board (PPADB).

Justice Brand therefore insisted that the Authority’s objection to the judgement of the High Court should fail, adding that the reliance by the Authority on the ‘once and for all’ rule must also fail.

Assisted by Justices of appeal, Isaac Lesetedi and Tebogo Tau, the Authority’s appeal was therefore dismissed with costs.

Creative Business Solutions and Rabbit Group were represented by Odirile Itumeleng and Mboki Chilisa respectively.




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