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NPA probes cartel cases

Jul 03 2011 10:56 Amanda Visser

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Pretoria - The National Prosecuting Authority (NPA) is starting to look at cartel cases before the Competition Commission.

According to legal firm Webber Wentzel, this could signify considerable risk to companies and enterprises that have confessed to the commission in order to receive indemnity from action by the commission.

It means they could be criminally prosecuted and even sent to jail for cartel activity.

This is because the Competition Commission and the NPA do not yet have a formal cooperation agreement relating to cartel investigations.

This cooperation agreement is a requirement in terms of the amendments to the Competition Act.

This risk could also turn off the commission’s stream of information regarding cartel activities, as companies or individuals’ indemnity before the commission affords them no protection from the NPA.

Advocate Oliver Jozi, the head of the commission’s cartel unit, told Sake24 the commission had not yet formally sat down with the NPA to work out an agreement.

Webber Wentzel partner Martin Versfeld said that individuals who had “lifted their skirts” and disclosed everything to the commission, had exposed themselves to more risk than they had anticipated.

In terms of the commission’s corporate leniency policy, a company that first confesses can receive indemnity from prosecution.
Without a cooperation agreement the NPA can revisit the investigations – for as much as 30 years.

People have handed the commission their heads on a platter and now the NPA can say, “Thanks, we'll take it from here,” he said.

Webber Wentzel partner Daryl Dingley said members of the cartel could be prosecuted for fraud, extortion and corruption in terms of the Prevention and Combating of Corrupt Activities Act.

In terms of this act directors can be obliged to exchange their designer suits for orange overalls for a period.

Versfeld said because of the substantial consequences of cartel behaviour in South Africa the NPA will make resources available to prosecute cases.

“It won't necessarily proceed with all cartel cases, but will work selectively.”

He said public policy will probably play a role in deciding which cases should be prosecuted.

The names of companies and individuals guilty of tender fraud will also be added to National Treasury’s register of tender offenders.

The names will remain there for a minimum of five and a maximum of ten years.

During that period the company or individual may not receive any tenders from a state entity.

“Should this occur, the tender process must be suspended,” Versfeld added.

The register is on National Treasury’s website and currently contains only two names.

It won't do any good to change a company’s name or create a new company.

The details of each new enterprise started by the individual also has to be entered into the register.
npa  |  price-fixing
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