Tribunal hearing reveals extent of construction collusion
The two-day sitting of the competition tribunal hearing revealed the extent of the collusion within the construction sector between 1999 and 2009. It also revealed many of the mechanisms used by the companies to facilitate the fraud. The hearings held by the tribunal in Pretoria to decide if it would approve the settlement agreements arrived at through negotiations by the Competition Commission and 15 companies, saw companies revealing how payments were hidden on company books.
Tender, or "losers" fees were paid to companies for the cost of submitting dummy tenders. These were hidden by a number of companies in their books under "plant hire". It appears that auditors did not query these payments.
In one case, Esorfanki said it had paid out half-a-million rand in fees to two companies for submitting dummy tenders on a project. It placed these expenses under plant hire.
In many cases companies said they paid fees but could not find the evidence of the payments because "it's hard to know how they were recorded in financial statements without knowing the full amount". Neil Cloete, chief executive of G Liviero & Son, on Thursday said the cover pricing was “endemic” in the period under review by the tribunal – namely 2006 to 2009.
He was responding to questions from the Tribunal about what action was being taken against an employee who was involved in project that contravened the Competition Act. His response came as justification of why action had not been taken against the manager concerned.... Read the full, comprehensive news article and discuss at Mail & Guardian