Pioneer knew of price-fixing

Johannesburg - Pioneer Foods [JSE:PFG] has admitted its main witness in the bread price-fixing scandal had already been fingered in a forensic audit report as a major culprit in the matter, prior to the hearing on the issue held by the Competition Tribunal.

Speaking to Fin 24.com on Friday, Pioneer CEO André Hanekom said the company had initiated and concluded a forensic audit by Deloitte in 2008 "before the Competition Tribunal hearings".

Following the company's shareholders' meeting on Friday, Pioneer released a statement saying it "... regrets that its handling of the complaint referral created the impression of being obstructive". It went on to apologise "if its actions created impressions to the contrary".

Pioneer has never and will never knowingly condone anti-competitive behaviour, it said, adding it "will take whatever actions" are required to rectify its position, including disciplinary action where appropriate.

Pioneer chairperson Boy Blanckenberg also told shareholders the Competition Commission indicated it had concluded an investigation into a separate case regarding price collusion in Pioneer's maize and wheat milling business. The food giant may face a fine of up to R180m if found guilty.

Speaking to Fin24.com, Hanekom was at pains to explain what action was being taken, initially saying this was a confidential board matter, but adding that Pioneer will seek a "swift closure of the R195m penalty next week". That means Pioneer will probably not contest the Competition Tribunal's fine.

Asked if the company had conducted any internal investigations after allegations about a bread cartel surfaced in 2006, Hanekom eventually admitted that Deloitte conducted a forensic investigation which fingered a few individuals in the Western Cape.

However, he couldn't explain what action was taken against those individuals, only saying it was waiting for the tribunal outcome. But the tribunal hearing only started in June 2009, with the findings of that forensic probe used for the company's defence.

Hanekom's admission that the probe had fingered Sasko Bakeries' (Pioneer's bread division) general manager Andries Goosen, who was also the company's star witness, gives credence to the tribunal's ruling that "Pioneer's entire defence has been mounted on the basis of manifest falsehoods".

Hanekom couldn't explain why Pioneer used the same person to explain the group's innocence at the hearing when a forensic report placed the blame for the offences on that person.

"Goosen's testimony was false," ruled the tribunal. "Goosen not only lied to the tribunal and mislead it, but he admitted to lying under oath."

- Fin24.com