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COMPETITION TRIBUNAL

REPUBLIC OF SOUTH AFRICA

Case No: 016337

In the matter between:

The Competition Commission ...........................................................................................Applicant

and

MVA Bricks (Pty) Ltd .....................................................................................................Respondent

Panel: T Madima (Presiding Member),

A Ndoni (Tribunal Member) and

A Roskam (Tribunal Member)

Heard on: 20 March 2013

Decided on: 20 March 2013

Order

The Tribunal hereby confirms the order as agreed to and proposed by the Competition Commission and the respondent annexed hereto marked “A”.

Presiding Member

T Madima

Concurring: A Ndoni and A Roskam

IN THE COMPETITION TRIBUNAL OF SOUTH AFRICA

(HELD IN PRETORIA)

CT Case No: 30/CR/Mar12

CC Case No: 2009May4419

In the matter between:

THE COMPETITION COMMISSION . ...............................................................................Applicant

and

MVA BRICKS (PTY) LIMITED .....................................................................................Respondent

SETTLEMENT AGREEMENT BETWEEN THE COMPETITION COMMISSION AMD MVA BRICKS (PTY) LIMITED IN REGARD TO A CONTRAVENTION OF SECTION 4(1 )(b)(i) OF THE COMPETITION ACT, MO, 89 Of 1998 (AS AMENDED)

The Competition Commission ("Commission") and MVA Bricks (Pty) Limited ("MVA Bricks”) hereby agree that an application be made to the Competition Tribunal (“Tribunal'¹) for confirmation of this Settlement Agreement as an order of the Tribunal in terms of sections 58(1)(a){iii) and 59(1 )(a) of the Competition Act, No, 89 of 1998 (as amended), on the terms set out below:

1. Definitions

For the purposes of this Settlement Agreement the following definitions shall apply-

1.1. “Bosun Brick” means Bosun Brick Midrand (Pty) Ltd, a company duly registered and incorporated in terms of the company laws of the Republic of South Africa, with its principal place of business at corner Cresset and Musket Roads, Midrand Industrial Park, Midrand;

1.2. “Cast Industries" means Cast Industries (Pty) Ltd, a company duly registered and incorporated in terms of the company laws of the Republic of South Africa, with its principal place of business at 38 Spanner Road, Ciayville Industrial, Midrand;

1.3.^""CLF^"" means the corporate leniency policy of the Commission published in the Government Notice No. 628 of 23 May 2008, in Government Gazette No. 31064 of 23 May 2008.

1.4. “Commission” means the Competition Commission of South Africa, a statutory body, established in terms of section 19 of the Act, wfth its principal place of business at Building C, Mulayo Building, dti Campus, 77 Meintjies Street, Sunnyside, Pretoria, Gauteng;

1.5. " “Commissioner” means the Commissioner of the Competition Commission, appointed in terms of section 22 of the Act;

1.6. “ Concor Technicrete” means Murray & Roberts Building Products (Pty) Ltd t/a Concor Technicrete a company duly incorporated in terms of the company laws of the Republic of South Africa, with its principal place of business at corner Main Reef and Houtkapper Street, Rooderpoort, Johannesburg;

1.7. “Complaint* means the complaint initiated by the Commissioner on 07 May 2009 in terms of section 49B(1) of the Act under case number 2009May4419 against tire respondents for alleged contravention of section 4{lXb)(i) of the Act;

1.8. “Gmertc paving blocks” means paving blocks which include interlocking and bevelled paving blocks used in the industrial, commercial and residential markets in South Africa;

1.9. “Infrasef’ means Aveng (Africa) Limited Infraset, 'a company duly registered- and incorporated in terms of the company lam'of the Republic of South Africa, with its principal place of business at 204 Rivonia Road, Momingside, Sandton;

1.10. “MVA Bricks” means MVA Bricks (f%)^!Limited* a-company duly registered and incorporated in terms of the company laws of the Republic of South ’ Africa, with It principal place of business at Roger Dyson -Road, Pretoria West industrial, Pretoria.

1.11. “Respondents” means infraset, Bosun Brick, Cast Industries, Concor Technicrete, Vitro Bricks and MVA Bricks.

1.12. “Settlement Agreement* means this agreement duly signed. and concluded between the Commission and MVA Bricks;

1.13. “The Act” means the Competition Act, Ho. 89 of 1998, as amended;

1.14. “Tribunaf' means the Competition Tribunal of South Africa, a statutory body, established in terms of section 26 of the Act, with its principal place of business at Building C, (Vluiayo Building, DTI Campus, 77 Meintjies Street, Sunnyaide, Pretoria, Gauteng;

1.15. “Vibro Bricks” means Vibro Bricks (Pty) Ltd, a company duly registered and incorporated in terms of the company laws of the Republic of South Africa, with it principal place of business at Schurweburg Street, Mooiplaas Laudium, Pretoria.

2. Complaint investigation and the Commission’s findings

2.1. On 22 October 2008 Infraset applied for corporate leniency In terms of the CLP regarding its involvement in a cartel in the market for the manufacture and supply of generic paving blocks'- in South Africa. In the CLP application, Infraset submitted information and documents to the Commission indicating, inter alia, the respondents held meetings and discussions as a result of which they, inter alia, agreed to fix the selling price of generic paving blocks in contravention of section 4(1 )(b}(t) of the Act

2.2. Following infrasets application for corporate leniency, on 07 May 2009 the Commissioner initiated a complaint in terms of section 49B(1) of the Act against the respondents. The Commission duly investigated the complaint and found that the respondents had entered into an agreement, arrangement and understanding involving the fixing of the selling price of generic paving blocks in contravention of section 4(1 )(b)(i) of the Act The fixing of the selling price included an agreement among the respondents on, inter alia, minimum prices, transport costs and price increases of generic paving blocks. The Commission’s investigation established that the aforementioned conduct of the respondents commenced in or about 2001 and continued until at least 2008.

3. Settlement Discussions

3.1. On 28 November 2012 MVA Bricks made a written settlement proposal to the Commission. Following MVA Bricks’ settlement proposal, the Commission and MVA Bricks engaged in settlement discussions.

3.2. Eventually., on 18 February 2013 the Commission and MVA Bricks reached an agreement, the outcome of which is this Settlement Agreement

4. Admission

MVA Bricks admits that it has entered into an agreement with the Vibro Bricks, Cast Industries, Bosun Brick, and Concor Technicrete which contravened section 4{1)(b)(i) of the Act.

5. Agreement concerning future conduct

MVA Bricks agrees and undertakes to;

5.1. prepare and circulate a statement summarising the content of this Settlement Agreement to its employees who are managers and to its directors and relevant corporate governance structures within one (i) month after the date of confirmation of this Settlement Agreement as an order of the Tribunal;

5.2. refrain from engaging in price fixing in contravention of section 4(1 )(b)(i) of .the Act: and

5.3. develop and implement a compliance programme in order to ensure that its employees, management and directors do not engage in any conduct which constitutes a prohibited practice in terms of -the Act.

5.4. A copy of the compliance programme shall be submitted to the Commission within three (3) months after the date of confirmation of this Settlement Agreement as an order of the Tribunal.

6. Co-operation

6.1. MVA Bricks agrees and undertakes to^: cooperate fully with the Commission in its prosecution of the remaining respondents in the complaint referral.

6.2. This cooperation includes, but is not limited to:

6.2.1. providing the Commission with all relevant evidence available to it that may assist the Commission in its prosecution of the remaining respondents in the complaint referral; and

6.2.2. ensuring that all MVA Bricks’s current employees, and to the extent possible, former employees, who have knowledge of the meetings and discussions among the respondents are available to and co-operate with the Commission, both for purposes of consultation and to give evidence in proceedings before the Tribunal.

7. Administration Penalty

7.1. MVA Bricks is liable to pay an administrative penalty in terms of section 58(1}(a)(iii}_I read with sections 59(1)(a), 59(2) and (3) of the Act in the amount of R672 565.47 (SIX HUNDRED THOUSAND SEVENTY TWO THOUSAND AND FIVE HUNDRED AND SIXTY FIVE RAND FORTY SEVEN CENTS) representing 2.5% of MVA Bricks’s affected turnover for the financial year ended in February 2011;

7.2. MVA Bricks will pay the administrative penalty to the Commission within seven (7) months after the date of the confirmation of this Settlement Agreement as an order of the Tribunal;

7.3. MVA Bricks shall remit payment of the administrative penalty into the following bank account:

Name of account holder: COMPETITION COMMISSION

Bank name: ABSA BANK PRETORIA

Account number: 4050778576

Branch code: 323345

7.3. The Commission will pay the administrative penalty into the National Revenue Fund in terms of section 59(4} of the Act.

8. Full and final settlement

This Settlement Agreement, upon confirmation thereof as an order by the Tribunal concludes all proceedings between the Commission and MVA Bricks in relation to the contravention of section 4(1}(b)(i) of the Act, referred to the Tribunal under case number: CT Case No: 30/CR/Mar12.

SIGNED at Pretoria on this the 26th day of February 2013.

Duly authorised signatory

MVA Bricks (Pty) Limited

SIGNED at Pretoria on this the 11th day of March 2013.

Shan Ramburuth

The Commissioner, Competition Commission

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