Directors who collude to be prosecuted

22 April 2016 - 02:26 By Babalo Ndenze

The Department of Economic Development has set its sights on industry cartels and will next week introduce tough new legislation to criminally prosecute company directors and managers who engage in uncompetitive behaviour.Collusion and tender-rigging will now be made a criminal offence from May 1 under the Competition Act.Over the past few years South Africa has seen cartels in the construction industry that were fined more than R1-billion.The bread industry has also been embroiled in a price-fixing scandal.Speaking yesterday, Minister Ebrahim Patel said the introduction of the criminalisation section in the Competition Act was one of the state's plans to put an end to all cartel behaviour.He said the president had signed a proclamation that would bring Section 73A of the bill into operation from May 1."That section of the Competition Amendment Act deals with the criminalisation of cartel-related activity."He said the act itself set out prohibited acts, which were:Directly or indirectly fixing a purchase or selling price;Dividing markets by allocating customer supply with territories; orCollusive tendering."With this proclamation from May 1, it becomes a criminal offence for a director or manager of a firm to be engaged in these activities. We've done an enormous amount of work in the past number of years in competition investigations, both to uncover cartel actions and behaviour, but also to create greater clarity and certainty in the market as to what kind of actions qualify as prohibited practices," said Patel."There isn't a statutory offence at the moment with collusion in the form we've put. A criminal investigation can be conducted on a number of things, but we want to make sure prosecutors have very clear guidance of law to meet the test of illegality more easily."What we fundamentally want to try to do is to end cartel behaviour," said Patel...

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