Graft body: Charge construction colluders

Jul 18 2013 07:43

Johannesburg - Criminal charges must be laid against directors of construction companies who were collectively fined R1.46bn for collusion, Corruption Watch said on Wednesday.

"[We]..call on the relevant prosecuting authorities to lay criminal charges against those individuals who have contravened the Prevention and Combating of Corrupt Activities Act [Precca]," it said.

Corruption Watch made a submission to the Competition Tribunal on Wednesday at a hearing into the settlement agreement faced by 15 construction firms which rigged bids for 2010 Soccer World Cup infrastructure projects and other projects.

On June 24 the Competition Commission reached a settlement with 15 construction firms for collusive tendering in contravention of the Competition Act.

On Wednesday, Corruption Watch called on those affected by the collusive tendering, including municipalities, provinces and private entities to institute civil claims for damages suffered.

It said the collusion, which was prohibited by the Competition Act amounted to corruption.

"Thus where firms, through their employees and directors, participate in a bid-rigging cartel and engage in cover pricing to favour one or more firms in exchange for, for example a 'loser’s fee', this amounts, in Corruption Watch’s view, to an offence under Precca," it said

"Those individuals who participated in this corrupt activity can and should be charged with this criminal offence, to which criminal sanctions, including imprisonment, attach."

Corruption Watch also called on shareholders - particularly pension fund trustees and public financial institutions such as the Public Investment Corporation - to take legal action against directors who had been or should have been aware of the collusion.

It also called on the companies to "claw back" bonuses awarded to individuals implicated in the cartel.

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