Construction cartel: ‘Black book cost me my job’

2013-10-13 14:00

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Affidavits say construction executives understood participation in collusion was ‘expected’ from the 90s onwards

Former Murray & Roberts CEO Brian Bruce told City Press this week he was overlooked for a promotion at Murray & Roberts because he refused to take possession of the construction cartel’s “black book”.

The black book was a ledger where all allocated tenders were recorded by the construction cartel to ensure that projects were being allocated fairly.

Speaking to City Press after a public lecture on the construction cartel given by former Aveng CEO Roger Jardine at the Wits Business School this week, Bruce said at one point in his career he was going to be appointed as the head of construction at Murray & Roberts.

During the handover, he was expected to take over the black book. “I refused and was overlooked for the job because of that,” he said.

Bruce had to then move into other divisions at Murray?&?Roberts, he said, to climb the corporate ladder as further advancement in the construction business was blocked because of his refusal to take part in collusion.

This correlates with evidence given in affidavits by Stefanutti Stocks executives to the National Prosecuting Authority.

These affidavits state that construction executives understood that participation in collusion was “expected” from at least the early 90s onwards.

“In essence, it was part of the job of the managing director of a contracting company at the time,” said Stefanutti Stocks executive Schalk Ackerman in his affidavit.

Bruce was later appointed CEO in 2000 and claims it was his insistence on fighting collusion in Murray & Roberts which then got him the job.

Although Bruce signed the World Economic Forum’s anti-bribery and corruption agreement in 2003, and Murray?&?Roberts construction head Stephen Pell informed all directors that collusion should cease, it still continued in the construction company.

City Press reported in February that Pell alleged in his affidavit he had tried to stop collusion in the sector, although he admitted to taking part for three years.

Pell revealed in his statement that he took disciplinary action against several directors of the company, but was in turn threatened that they would expose the “organising and arranging” of projects if he persisted.

Pell was appointed managing director of construction at Murray?&?Roberts in 1997 and said it took him only a few months to become aware of the illegal behaviour.

He admitted to being inducted into the collusive meetings by his predecessor and to participating in them between 1997 and 2000.

Pell also admitted that at one stage he was the “policeman” of the cartel, who had to ensure that the pre-agreed and colluded tender was submitted.

After leaving Murray?&?Roberts, Pell was employed at Stefanutti Stocks and then at Aveng as an executive director.

At the lecture, Jardine said he had seen employees implicated in collusion simply leaving Aveng and taking up work with competitors, continuing “relatively unscathed”.

Pell left Aveng shortly after City Press reported on statements in his affidavit, and sources have suggested he might have been asked to

leave because of the revelations.

Jardine said the cartel was managed by a small group of individuals who met in five-star hotels to allocate construction projects. Succession planning was also done in these small circles, he said.

Murray?&?Roberts spokesperson Eduard Jardim said the company was not in a position to comment on Bruce’s allegations, arguing that the practice was from “many years ago” and “before the Competition Act”.

He further said: “We conducted several thorough investigations using independent legal advisers into the allegations of collusive behaviour at Murray?&?Roberts.

“All our evidence, reports and statements were handed over to the competition commission as part of the fast track settlement process and this was in turn investigated by the commission themselves.

“It is important to record that the collusive conduct noted in the fast track settlement process was never known to the Murray?&?Roberts board

and much less endorsed by it.

“This conduct came about as a result of the unauthorised actions of certain subsidiary directors.

“The employees or directors claimed by the commission to have been involved in the conduct left the employ of companies within the group a number of years ago.

“None of the current Murray & Roberts executives have been implicated in any form of collusive conduct through the fast track settlement process.

“We are also not in a position to respond to Stephen Pell’s claims as we have not seen his affidavits.”

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