Aveng hit with US$ 18.7 million cartel fine

South African construction company Aveng has reached a ZAR 129 million (US$ 18.7 million) settlement with the country's Competition Commission over its involvement in collusion in the rebar and wire mesh construction markets.

Aveng faced two complaints relating to anti-competitive conduct in its Steeldale Mesh business unit and to price fixing in the steel construction market. The penalty represents 8% of the group's 2008 turnover.

Aveng said three of its employees had been suspended, pending an internal enquiry, and added that it remains "fully committed" to cooperating with the Competition Commission in rooting out collusive behaviour in the industry. The company must also co-operate with the Commission in its prosecution of other companies involved.

This is not the first fine that the company has had to pay fines relating to anti-competitive practices. Its roof bolt division, Duraset, was hit with a ZAR 21.9 million (US$ 3.2 million) fine in 2009, while its subsidiary Infraset, which manufactures of pre-cast concrete and culverts, was fined ZAR 46 million (US$ 6.7 million) the same year for price fixing with competitors.

The Competition Commission has also investigated several South African construction companies, including Aveng subsidiary Grinaker-LTA, for alleged collusive conduct in tendering, price fixing and market allocation in the foundations market.

Grinaker-LTA applied for and was granted conditional immunity, so the commission is not seeking a penalty against it.

The news comes after the Competition Commission responded to the widespread collusion in the South African construction industry by initiating a fast-track settlement process at the start of February. This encourages companies to come forward and disclose any known irregular practices, in return for more lenient penalties.