Aberdare Cables, a unit belonging to Allied Electronics Corporation (Altron) company Powertech, has been raided by the Competition Commission.
Yesterday, the commission raided Aberdare Cables, Alvern Cables, South Ocean Electric Wire Company, and Tulisa Cables, which are all based in Gauteng.
It conducted the search and seizure operation at the four electrical cable manufacturers and suppliers on suspicion of price-fixing, market allocation and collusive tendering.
JSE-listed Altron says it is co-operating with the authorities, and is taking advice from its external lawyers on the impact of the investigation.
Yesterday, Altron's shares went to an intraday low of R26.90, after opening at R27.95. The shares recovered to close at R28, but were down R1 in mid-morning trade today.
If found guilty, each company could be fined up to 10% of its turnover. It is not known how much revenue Aberdare turns over as its revenue is rolled up into Powertech's. However, Powertech's turnover was R7 billion in the year to February.
Chris Gilmour, an analyst with Absa Investments, says the fact that a judge allowed the commission to conduct a raid means it is very certain of its facts. “A judge will not allow this lightly.”
Long-term investigation
Some of Aberdare's high-profile contracts include cabling supplied to the new King Shaka airport, in Durban; Eskom; and the Durban Container Terminal Expansion.
The raids followed a seven-month investigation by the commission, which was started in November last year and resulted in a commission-instigated complaint in March. The investigation found the companies were charging similar prices for their products.
All four companies produce high-voltage cables for industrial use, as well as low- and medium-voltage cables for households. Their customers include power supply authorities, municipalities, railway and transport authorities, and construction companies.
Aberdare Cables has five manufacturing sites, in three provinces of SA, and offshore operations in Mozambique, Portugal and Spain. It makes and sells a range of products with customer-specific adaptation, design capabilities and technical backup service.
Keith Weeks, head of the commission's Enforcements and Exemptions Division, was not available to comment on the raid this morning. However, he told Business Day that the four companies had monopolised the industry.
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