Cartels: Black Business Council wants members to pursue civil claims

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The Black Business Council (BBC) announced today that it is encouraging its members to pursue civil claims for damages against members of various cartels that have been prosecuted in South Africa.

At a seminar in Sandton about the impact of cartel activity on transformation in South Africa, The BBC announced that it was establishing a dedicated desk to focus on cartel collusion.

The BBC also announced that alongside local law firm Abrahams Kiewitz and international law firm Hausfeld LLP it will be conducting a full review of recent collusive or cartel activity in South Africa to look at damages caused to black businesses.

American lawyer Michael Hausfeld, the managing director of Hausfeld LLP, is in South Africa sharing with the BBC and its members the experience he has gained regarding civil claims against cartel members from the US and Europe.

Gregory Mofokeng, the general secretary of the Black Business Council in the Built Environment (BBCBE), confirmed that his members were looking to take action against the construction-cartel members.

Chris Jiyane, a BBCBE councillor, accused South Africa’s competition authorities of colluding with the construction cartel by agreeing not to name and shame individuals involved in collusion in the construction cartel.

Many participants at the BBC’s seminar shared this sentiment.

“The BBC won’t watch from the sidelines any more,” said BBC CEO Xolani Qubeka. “This flies in the face of transformation.”

Speaking at a public lecture at Wits University a few weeks ago, former Aveng CEO Roger Jardine said that a lack of transformation in the construction sector had played its part in allowing the construction cartel to operate for so many years.

He said the construction cartel was managed by a small group of individuals and that, in these small circles, there was hand-picked succession planning.

Jardine expressed a view that if transformation in the sector had taken place, it would have probably been much harder to run the cartel.

Qubeka said that most of the mainstream business associations and chambers had been very quiet about the construction cartel.

Speaking at the seminar, labour federation Cosatu president Sdumo Dlamini said petty criminals were jailed for crimes involving hundreds of rand, while those who steal millions or billions through cartel activity do so with “impunity” and get a “slap on the wrist”.

“Those who transgress the law must be treated like criminals, because they are criminals,” said Dlamini. “They should be arrested and sent to jail for treason.”

Speaking at the seminar, the competition commission’s principal investigator for the cartel division, Makgale Mohlala, said cartels were driven by greed.

“If you had to listen to cartel members telling you how they ripped off the country, you would ask, ‘do these people have any conscience’,” said Mohlala.

Mohlala said there was very little interest in companies pursuing civil claims against the construction cartel and he did not understand why.

“The interest in pursuing damages claims has been very disappointing,” said Mohlala. “Even government departments have not come forward strongly against this.”

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