It's not over for colluding construction bosses

Certain executives and directors at the helm of some of SA's biggest construction companies, implicated in the scandal, could face prosecution, according to the Hawks. A Weekend Argus report says investigations are at an advanced stage. 'There are strong allegations of fraud in this case,' Hawks spokesperson Captain Paul Ramoloko is quoted as saying. The section introducing the criminalisation of collusive conduct in the Competition Amendment Act has yet to be implemented, but the Hawks will rely on the Corruption Act, which stipulates that it is an offence to fix prices or to improperly influence the outcomes of awarding contracts. Full Weekend Argus report (subscription needed)

Company officials can still be prosecuted for criminal offences, says a Mail & Guardian report. However, notes the report, the question remains whether there is any appetite to pursue jail time for the senior staff of these companies, which would be costly and, as some have said, might discourage full disclosure by companies in other sectors, such as health, which are also under investigation. There is an undertaking that the National Prosecuting Authority will not pursue criminal investigations until the tribunal process has been completed, according to the report. It states the SA Local Government Association last week said it plans to pursue damage claims against companies involved in the construction of the Fifa World Cup stadiums. Competition Commission head Shan Ramburuth estimated that the costs could have been inflated by between 10% and 30%, which on the Johannesburg Stadium at 30% amounts to R680m, according to the report. Full Mail & Guardian report

Meanwhile, shareholder activist Theo Botha called on companies to 'name and blame' them, claw back all the bonuses paid from 2006 and for new management in these companies, according to a report in Business Report. Botha is quoted in the report as saying: 'The whole industry is colluding and nobody is held responsible. No names are mentioned. How can that be? They must tell shareholders who left the company and were fired. Companies need to be transparent on this.' The report notes Botha said it defied logic to suggest that not a single line manager had gone to their chief executive and told them the company needed to hold back on a specific contract and push forward with another because of collusive tendering. The report says the SA Institution of Civil Engineering denounced the collusion, anti-competitive and unethical behaviour by the construction firms, which it called corruption by another name. It stressed that only the people in a company, and not the company, could collude. Another report in Business Report says the level of transparency among the listed construction firms that reached settlement agreements with the Competition Commission about punitive action that had been taken against current or former executives and senior managers responsible for collusive tendering and bid-rigging has been poor. First report in Business Report Second report in Business Report

In another development aimed at naming and shaming individuals, Business Leadership SA has called on the companies penalised by the Competition Commission for anticompetitive behaviour to reveal what action had been taken against those involved and what provisions were in place to prevent future collusion. Last week, notes an Engineering News report, the Competition Commission levied a collective R1.46bn fine on 15 of the 18 construction companies found liable for collusive tendering between 2006 and 2011. Wilson Bayly Holmes-Ovcon was slapped with the largest fine at R311.29m, while Murray & Roberts (R309.05m), Stefanutti Stocks (R306.89m) and Aveng (R306.57m) were also slapped with heavy fines. Basil Read and Haw & Inglis followed with a penalty of R94.94m and R45.31m respectively, while Raubex received a R58.83m penalty. Full Engineering News report

What went on behind closed doors is revealed in a Moneyweb report. It says some time during 2006 Grinaker LTA (the construction operating business unit of Aveng), WBHO, Murray & Roberts, Group Five, Concor and Basil Read met twice and reached agreements on who will get to build which stadium. They shared Mbombela, Peter Mokaba, Moses Mabhida, Soccer City, Nelson Mandela Bay and Green Point up between themselves, agreeing to put in cover tenders and aim for a profit margin of 17.5%, according to the report. It says these are some of the details contained in the various consent agreements between the Competition Commission and 15 construction companies that was part of the fast-track process in the investigation into anti-competitive practices in the industry. There were meetings, cover prices swopped so that one party could win or lose a tender, loser's fees paid and agreements on profit margins. Each consent agreement sketches the complaints that were initiated by the Commission in 2009, originally specifically pertaining to the World Cup stadiums, but then believed by the commission stating to be much more widespread. Full Moneyweb report Consent agreements