So CompCom HAS cleared Sekunjalo

John Yeld says commission has decided that bidding by 4 entities in same group was not collusive

So CompCom HAS cleared Sekunjalo

14 September 2016

FINALLY, the Competition Commission has made up its mind on a vexing issue that has been waiting adjudication for the past two years and five months: there was no collusive bidding by four entities of the Sekunjalo Group when they each put in a bid for an R800 million tender to manage and operate South Africa’s seven-vessel fisheries and patrol fleet for five years.

This is the finding of an investigation by the Commission that was confirmed on August 30 – a full 29 months after receiving a formal request from Public Protector Thuli Madonsela to investigate alleged collusive bidding in respect of the tender, known as MLRF 088.

The tender had been awarded to one of Sekunjalo’s four entities, SMSC (Sekunjalo Marine Services Consortium), in November 2011, but it was then withdrawn in February the following year because of major irregularities in the award process on the part of the Department of Agriculture, Forestry and Fisheries.

The Competition Commission received Madonsela’s request on 12 March 2014 and duly opened an investigation docket under case number 2014Nov0664 – suggesting a delay of some eight months before the investigation actually started. The brief was to investigate whether the submission of bids for MLRF 088 by four entities all falling under the Sekunjalo Group – Premier Fishing, Premier Fishing Consortium, Sekunjalo Limited and SMSC (Sekunjalo Marine Services Consortium) – had constituted collusive tendering or bid rigging, as alleged by unsuccessful bidder and previous tender holder Smit Amandla Marine.

On 5 January 2016, the Competition Commission also received a formal complaint from DA MP Pieter van Dalen, previously his party’s deputy shadow minister for fisheries, about the same issue: alleged collusive bidding. Van Dalen and Smit Amandla had been the two complainants who requested the Public Protector to investigate the awarding of MLRF 088.

Van Dalen’s complaint to the Competition Commission was logged as case number 2016Jan003. The two cases were consolidated into a single investigation that was completed by July 30. The outcome of the investigation was then referred to the Commission for a decision at its meeting on 23 August.

The Commission concluded that:

– Premier Fishing was a wholly-owned subsidiary of Sekunjalo Investments;

– Sekunjalo Marine Services was a division of Sekunjalo Investments; and

– Sekunjalo Marine Services Consortium and Premier Fishing Consortium were also controlled by Sekunjalo Investments.

“ Therefore, Sekunjalo Investments, Sekunjalo Marine Services, Premier Fishing, Premier Fishing Consortium and Sekunjalo Marine Services Consortium are constituent firms within a single economic entity as contemplated in section 4(5) the Competition Act, 98 of 1999 as amended.

Section 4(1)(b) of the Act, which prohibits collusive agreements such as the one alleged in this case, does not apply to constituent firms within a single economic entity.Therefore, the Commission has decided, on the basis of the information available to it, not to refer the matter to the Competition Tribunal for prosecution... The Commission considers this matter finalised.”

This decision was formally communicated to Van Dalen on 30 August, and to the Public Protector one day later, on September 1. They have 20 working days to appeal.

Van Dalen said today (Wednesday September 14) that he was mulling over a possible appeal, while neither Sekunjalo nor the Public Protector’s office had responded to a request for comment at the time of writing.

* In mid-August, this writer requested a progress report on the current status of the investigation from Competition Commission spokesman Itumeleng Lesofe and communications assistant Lydia Molefe.

A week later, on August 24 – one day after the Commission had taken its decision – Molefe responded: “Apologies for the late response. We haven’t completed our investigation. We can only respond to you once the investigation is completed.”

The same day, the writer sent a follow-up email to both, requesting further clarification.

There was no reply.

Journalist John Yeld retired at the end of 2014 from the Cape Argus newspaper where he specialised in environmental and science issues. He still writes on a freelance basis.

Disclosure: Yeld was involved in an unresolved dispute with Sekunjalo.