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Competition body under fire over irregularities

BUSINESS LIVE / 27 SEPTEMBER 2018 - 05:05 / BEKEZELA PHAKATHI

The Competition Commission, a key statutory body mandated to investigate restrictive business practices and abuse of dominant positions and mergers, has come under fire for contravening its procurement processes.

In the commission’s 2017/2018 annual report tabled in parliament last week, auditor-general Kimi Makwetu flagged irregular expenditure of R129m.

Auditor-General Kimi Makwetu. Picture: BUSINESS DAY

This includes R40m in 2017 and R86m in 2018 related to contravention of procurement of forensic, economic and legal experts used on cases.

Makwetu said there were "numerous supply chain management irregularities" and the commission had failed to obtain sufficient guidance in relation to procurement processes from the National Treasury.

Although the commission received an unqualified audit opinion, Makwetu said it had not followed proper tender processes in various instances.

It had also exceeded its expenditure in terms of its approved budget.

In the wake of the tabling of the annual report, the DA reiterated its calls for a commission of inquiry to be established to probe the running of the Competition Commission amid allegations of corruption and mismanagement at the institution.

The DA says allegations against the body threaten its integrity and stability.

The party’s MP and economic development spokesperson, Michael Cardo, said on Wednesday Makwetu’s findings illustrated that "a murky cloud hangs over the Competition Commission’s financial and administrative conduct, with flagrant violations of regulations for supply chain management".

"Minister [Ebrahim] Patel needs to establish a commission to investigate these serious matters forthwith," said Cardo, who added he had written to the minister in July asking him to set up a commission of inquiry, but has not received a response to date. Cardo said the inquiry should investigate the allegations that the commission was favouring certain legal firms in cartel cases.

"This includes the precise nature of the professional and financial relationship between the commission and Ndzabandzaba Attorneys.

"The firm’s principal partner, Anthony Ndzabandzaba, previously served as head of training and development in the commission’s cartels division. His law firm has benefited handsomely from the commission’s coffers in the last 18 months, raking in over R10m for work on cartel cases alone [63% of all such expenditure by the commission]," Cardo said.

The inquiry should look into potential conflicts of interest among members of the entity’s executive committee, he said.

The DA’s call comes as parliament is finalising the processing of the Competition Amendment Bill, which is intended to provide for an extension of the mandate of the competition authorities and the executive to tackle high levels of economic concentration, limited transformation in the SA economy and abuse of market power by dominant firms.

The bill seeks to amend the process by which the commission may initiate market inquiries, empower the economic development minister to initiate market inquiries, and promote the administrative efficiency of the Competition Commission and Competition Tribunal.

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LINK : https://www.businesslive.co.za/bd/companies/2018-09-27-competition-body-under-fire-over-irregularities/

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