Criminal charges mooted

A R195-million fine handed down by the Competition Tribunal may just be the start of Pioneer Foods' concerns, as the Competition Commission is considering laying perjury charges against senior manager Andries Goosen. Goosen, who is the managing director of Sasko, Pioneer's bakery division, is accused in the tribunal's judgment of lying under oath, misleading the tribunal and providing false testimony. "We should be clear that we believe that Goosen has lied to the tribunal," the judgment states. "Whether or not Goosen chose to mislead this tribunal of his own volition or was asked to protect other persons in the organisation is not clear to us," states the judgment. "What is clear to us is that Goosen's lack of credibility as a witness was put beyond doubt." However, Goosen was not singled out on his own, with the tribunal arguing that Pioneer's conduct left "much to be desired" and that its attitude towards the tribunal and commission was "downright disdainful".

The tribunal's judgment argues that Pioneer's entire case was "mounted on the basis of manifest falsehoods". "Moreover, these were no ordinary falsehoods; they did not involve the mere distortion of a particular fact. We believe that successive layers of Pioneer's management, reaching up to Goosen at least, were involved in concocting these elaborate falsehoods."

If Goosen is charged with perjury, the decision would have to come from the Competition Commission and commissioner Shan Ramburuth says it is considering its options. The commission has laid perjury charges before -- the last time after it emerged that a senior Vodacom executive had lied to the tribunal during a merger hearing. Pioneer Foods had attempted to clear its name on charges of ­collusion being faced by its bread businesses, the Sasko and Duens bakeries. This followed an investigation by the commission into certain companies suspected of fixing prices for bread in contravention of the Competition Act. Other companies included in the investigation included Premier Foods (Blue Ribbon Bakeries), Foodcorp (Sunbake Bakeries) and Tiger Brands (Albany Bakeries).

Premier was granted immunity from prosecution because of its cooperation with the investigation and the fact that it confessed to its role in the cartel. Tiger Brands also decided to cooperate with the commission, culminating in its admission of participation and a fine of more than R90-million. Foodcorp was third to settle with the commission, paying a fine of R45-million.

But Pioneer decided to take the commission on, claiming it was not part of a national bread cartel. "When we consider the evidence placed before us in its totality, what we see from all these accounts is a culture of cooperation so entrenched in the daily operations of these four companies that their employees, in full knowledge of the unlawfulness of these arrangements, had no difficulty in reproducing it on all levels," the judgment states. 'They met regularly, they called each other frequently, they asked the one to call the other, they agreed on implementation dates for their increases, they exchanged increase letters to give each other comfort, they divided markets at both a national level and a local level, they monitored each other's compliance and had no hesitation in enforcing their illegal arrangements under the guise of 'fairness'. "Naked cartel behaviour is not justifiable under our legislation and is presumptively harmful," the judgment states. "In this particular case the offences are more so repugnant because they have affected the poorest of the poor, for whom standard bread is a staple."

The tribunal points out that, up to the date of the hearing, Pioneer had not taken any action against employees implicated in the collusive conduct. Pioneer issued a statement to its shareholders this week advising them of the tribunal's decision and the R195-million fine. "The company will review the findings of the Competition Tribunal and consider its response, after which further announcements will be made," says the statement.

Source: Mail & Guardian