Murray & Roberts Says Soccer Deal Collusion Fine Is Too High
Murray & Roberts Holdings Ltd. (MUR), South Africa’s second-biggest builder, apologized for colluding on contracts for work including 2010 soccer World Cup stadiums and said a $31 million fine is too harsh.
“Of the projects we successfully tendered on, our gross profit was far less than the 309 million-rand ($31 million) penalty,” Murray & Roberts Chief Executive Officer Henry Laas said in a letter published by the Sunday Times. “This penalty would be severe in normal times, and given the difficult market conditions, it is all the more acute.”
The Competition Tribunal today confirmed fines for 13 of 15 companies. Decisions for the remaining two, Aveng Ltd. (AEG), South Africa’s biggest builder by market value, and Giuricich Bros Construction (Pty) Ltd, are still pending awaiting more information, the Pretoria-based tribunal said in an e-mailed statement. Murray & Roberts, Wilson Bayly Holmes-Ovcon Ltd. (WBO) and 12 other construction companies faced record collective fees of 1.46 billion rand for contract rigging.
Documents from the Competition Commission show that seven companies colluded to rig a profit margin of 17.5 percent on six stadiums for the 2010 soccer World Cup. They met twice, in 2006 or thereabouts, according to the documents.
The seven-member FTSE/JSE Africa Construction and Building Materials Index has declined 1.2 percent this year, compared with a 4.2 percent gain in the 166-member FTSE/JSE Africa All-Share Index.
Murray & Roberts shares rose 2 percent to 25.76 rand at the close in Johannesburg, the highest since July 16, valuing the company at 11.5 billion rand.
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