Afgri to pay millions after grain deal
Johannesburg - Afgri [JSE:AFR] has agreed to pay an administrative penalty of R15.6m as part of its settlement with the Competition Commission.
The company on Monday said it had reached a settlement with the Competition Commission regarding a complaint initiated by the commission that Afgri, as one of the members of Grain Silo Industry (GSI), had contravened the Competition Act by collectively participating in the determination of the South African Futures Exchange's (Safex's) daily grain storage tariffs via its membership of GSI.
The commission's investigation focused on the historic recommendation by members of the GSI to SAFEX of a uniform daily grain storage tariff at the request of Safex.
Afgri said the commission, having investigated other alleged contraventions, found that Afgri had not excessively priced any grain storage tariff or any other related products or services which were under investigation.
The terms of the settlement are subject to confirmation by the Competition Tribunal.
The amount of the penalty has been fully provided for by Afgri.
"We are satisfied with the outcome of the settlement negotiations which have brought finality to the commission's investigation," said Afgri CEO Chris Venter.
He said the investigation related to historic conduct which ceased some time ago with Afgri having stopped recommending SAFEX tariffs through the GSI before the commission's investigation had commenced.
"We respect the commission's finding that the recommendation of the SAFEX tariffs technically constituted a contravention of the Competition Act. The recommendation of the SAFEX tariffs was done at the request of SAFEX and on the bona fide understanding that it was crucial for the proper functioning of SAFEX that there were uniform daily grain storage tariffs," Venter said.
The SAFEX tariffs enable traders to calculate the maximum amount of storage charges applicable on a particular SAFEX transaction.