Watchdog probes Group Five

The Competition Commission has launched a “normal” investigation into construction firm Group Five after attempts to reach a settlement failed.

The firm, which has been implicated in anti-competitive conduct in connection with the construction of Durban’s Moses Mabhida Stadium, could now face the maximum fine of 10 percent of its annual turnover for contravening the Competition Act, the commission said yesterday.

And once the inquiry is complete, the eThekwini municipality could be in a position to file a civil claim.

In June it emerged that Group Five, Grinaker-LTA, WBHO, Murray & Roberts, Concor, Basil Read and Stefanutti had failed to disclose a collusive agreement regarding the construction of the 2010 World Cup stadiums.

The commission has finalised settlements with all except Group Five.

According to reports, the City of Cape Town is preparing to sue the companies that colluded on its stadium.

The City of Durban has indicated that it would do the same but, as a settlement was not reached, this is pending the completion of the commission’s investigation and a guilty ruling.

The commission started investigating anti-competitive conduct in 2009 and offered leniency for disclosures.

Group Five chief executive officer Mike Upton said the firm had been granted provisional leniency for anti-competitive conduct in 25 projects.

But insofar as Moses Mabhida Stadium was concerned, the contract was one of four that the commission had granted no leniency on.

“The group had no evidence of its collusive involvement on these four contracts and could not responsibly accede to the proposed penalties and chose not to settle hastily,” said Upton. - The Mercury