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M&R blames cartel on 'ignorance'

Johannesburg - Construction firm Murray & Roberts says there has been "an extensive amount of work" done to educate staff members about consequences of their actions, after it was exposed for its involvement in a 34-year long cartel.

That's according to the group's CEO, Brian Bruce, who said ignorance of the consequences of people's actions is "a big problem".

Bruce's comments follow a Competition Commission investigation into 10 companies involved in SA's precast concrete market. The commission found that two subsidiaries of the country's major construction companies, Murray & Roberts and Aveng, were involved in cartel activities.

Bruce said: "One of the challenges that we face in the competition law is that this has got nothing to do with what decisions might or might not be made at board level.

"This has got to do with the individual's decision made about engaging in a collusive action with somebody else in the industry, often unbeknown to people around them. By virtue of that action, the organisation becomes guilty of anti-competitive behaviour."

The investigation was sparked by an application for clemency under the commission's corporate leniency programme by Rocla, a Murray & Roberts subsidiary, regarding its involvement in a cartel in the precast concrete market, the commission said.

Reports claimed that Rocla, a leader in the precast concrete cartel, received, inter alia, a 5% commission in exchange for its "influence" in winning a profitable Gautrain contract for concrete sleepers. The contract was awarded to Rocla and Aveng's Infraset joint venture, despite Rocla not manufacturing sleepers.

Executives suspended

Bruce said there is a "massive and onerous obligation" that sits on the group when it is an organisation as complex as Murray & Roberts.

"But I believe that every member of Murray & Roberts' leadership team is absolutely committed to eliminating this, and we have taken - where we have uncovered such behaviour - the appropriate action to protect ourselves."

"Unfortunately it does have implications on our competitors, but they had the opportunity to do it the same way as we have," said Bruce.

On February 13 2009, Murray & Roberts rival Aveng was fined R46.3m by the Competition Commission after an investigation into anti-competitive behaviour at its subsidiary Infraset.

The administrative penalty - paid as part of a consent agreement - amounted to 8% of Infraset's turnover (excluding revenue from its paving products) in financial 2007. The sum will be paid to the commission in three equal annual payments.

The group has suspended two executives implicated in the investigation pending an internal probe into any misconduct associated with the commission's findings. In addition, another executive has been placed on special leave.

Other companies investigated were Southern Pipeline Contractors, Concrete Units, Grallio, Cobro, Cape Concrete, Concrite Walls, Craig Concrete and D&D.

- Fin24.com

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