WBHO’s tender-rigging executive gets off scot-free

2015-03-22 19:00

Construction giant WBHO took no disciplinary action against an executive director of the board who was implicated in collusion in a construction cartel, allowing him to continue serving as a board member for another three years.

This came to light this week after the Competition Commission began to prosecute cases of collusion stemming from the cartel, which were not settled under the Commission’s fast-track settlement process.

The implicated WBHO director was allowed to resign in 2014, almost three years after WBHO was made aware of his involvement in tender rigging.

Jacobus Petrus Botha, who goes by the nickname Kobie, was appointed as a WBHO executive director in 2009 and served until January 2014.

He was a veteran of the construction firm, having joined in 1981.

He was also the head of the operational risk committee at WBHO until he resigned.

When Botha resigned, WBHO issued a Sens announcement stating: “The board would like to thank Kobie for the valued contribution that he has made over the past five years.

“He will continue working for the group in a reduced capacity as he approaches retirement.”

Almost three years earlier, on April 15 2011, WBHO approached the Competition Commission, declaring 45 violations of the Competition Act, as part of the Commission’s fast-track settlement process.

WBHO received immunity from prosecution for 11 of these projects.

One of the 11 projects was an upgrade to the N5 road between Senekal and Vaalpenspruit, Free State, for the SA National Roads Agency Limited.

The other firms WBHO implicated in the collusion on the N5 project, which is said to have taken place in late 2006, were Murray & Roberts’ subsidiary Concor and Group Five, which won the tender.

Murray & Roberts admitted guilt in the matter and settled with the Commission under the fast-track settlement process, while Group Five chose not to settle.

This week, the Competition Commission referred a case regarding the N5 project against Group Five to the Competition Tribunal for adjudication and has asked for the construction giant to receive a fine equivalent to 10% of its annual group turnover.

In the last financial year, Group Five’s turnover was R6.9?billion, so the fine – if found guilty – could be hundreds of millions of rands.

The Commission’s referral affidavit in this case identifies executives at the construction firms who are alleged to have facilitated the collusion – the first time their names have been made public.

Group Five’s Andrew McJannet, currently the company’s group executive for construction, is also alleged to have participated in the collusion, as well as a Frederick Venter, who worked at Concor at the time, but moved to Stefanutti Stocks in October 2010.

When contacted for comment this week, WBHO told City Press it was a leniency applicant in the case, was bound by confidentiality and could not comment any further.

Group Five directed City Press to its recent Sens announcement, which states that the construction giant’s lawyers have advised that there are “evidentiary hurdles” in the Commission’s case and it had “good prospects of success” in opposing the matter.

Stefanutti Stocks this week told City Press all directors were called upon to make a full disclosure, which they have done.

“A number of directors also tendered their resignations to the board. The board declined to accept the tenders of resignation because it was felt that to do so would ultimately not be in the best interests of the shareholders.”

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