Dawn raid on furniture removal firms

Competition Commission investigators yesterday raided the premises of four furniture removal firms, one for the second time in five years, in a co-ordinated operation as part of its ongoing investigation into collusion in the industry. By late yesterday afternoon, commission investigators were still on the premises of most of the companies. The commission confirmed that it was conducting a search and seizure operation at the premises of Stuttaford Van Lines in Port Elizabeth and Bloemfontein, Pickfords Removals SA in Port Elizabeth and Bloemfontein, Afriworld in Bloemfontein and Cape Express Removals in Cape Town. It previously investigated all four firms for collusive tendering for furniture removal tenders to a wide range of customers, including the SA National Defence Force, government departments, state-owned entities, private and public companies and private individuals.

That inquiry formed part of a probe into 69 companies offering furniture removal services for colluding on tenders that revealed more than 3 500 relocation tenders were subjected to collusion by these companies between 2007 and 2012. Themba Mathebula, a spokesman for the commission, confirmed 16 furniture removal firms had since 2012 reached settlement agreements with the commission and 13 firms had not settled cases against them. Cape Express settled with the commission and was being raided for the second time, but Pickfords and Afriworld did not settle with the commission and those cases had been referred to the tribunal for prosecution. Stuttaford has also not settled with the commission and its case is one of three where the commission has completed its investigation but not yet referred it to the tribunal. Mathebula said yesterday that the commission obtained information that these firms had allegedly resumed or continued collusion after 2013, resulting in the new investigation against them.

“The dawn raid operation forms part of the commission’s new investigation into alleged collusive conduct in the market for provision of furniture removal services. The commission has reasonable grounds to believe that information relevant to the new investigation is in the premises of the firms.” But Marius Engelbrecht, the managing director of Cape Express Removals, yesterday described the raid as “a witch-hunt”. “I consider it unfair taking into consideration that since the raid in 2010, we paid our fine and it would be stupid for us not to honour the agreement and rules set down. “We also gave them full assistance and helped their investigation against all the companies involved, spending numerous hours compiling reports and giving them written proof.” “For me it’s quite a laughable and ludicrous situation,” he said. The tribunal in October last year confirmed a settlement agreement in terms of which Cape Express agreed to pay a fine of R645 710.

Charl Pienaar, the managing director of Stutterford Van Lines, said late yesterday that commission investigators were still on the firm’s premises and they were co-operating and assisting them where they could. Pienaar said the company’s legal team was still involved in discussions with the commission about the previous case. Vikesh Ramdhim, the managing director of Pickfords Removals, said the raid was still underway and the firm was co-operating and complying with the requests of commission investigators. Ramdhim indicated that the commission investigation into a previous case against the company had not yet been concluded. Attempts to obtain comment from the managing director of Afriwold Furniture Removals were unsuccessful, but a woman at the company named only ‘Sybil’ denied any raid had taken place and thanked Business Report for tipping them off. Evidence of continuing collusion in the removals industry surfaced in a tribunal hearing in November when Peter Brauteseth from Joel Transport said he had been approached “by a fool” the previous week wanting a cover quote.

Brauteseth said he had been involved in the industry for 25 years and cover tendering in the removals industry was “sort of a normal practice”. Cover pricing involves some firms submitting non-competitive bids to enable a fellow cartel member to win a tender.