Picture: THINKSTOCK
Picture: THINKSTOCK

ALTHOUGH business executives can now be charged for engaging in cartels‚ they are likely to walk away from a criminal trial with just a slap on the wrist.

This is because a provision of the Competition Act‚ stating that a person guilty of an offence under competition laws may be fined up to R500,000 or imprisoned for up to 10 years‚ has not yet come into effect.

This is according to competition lawyer Martin Versfeld‚ who was speaking at a seminar on the amendments to the Competition Act in Sandton‚ Johannesburg on Tuesday.

As of May 1 2016‚ directors and managers of businesses can be held criminally liable for a company’s collusive behaviour‚ but the hefty penalties cannot yet be imposed.

This effectively means that executives found guilty under competition laws may only be fined up to R2,000 or spend a maximum of six months in prison‚ Versfeld said.

Under the new law‚ a person commits an offence by engaging in price-fixing‚ collusive tendering or agreeing with other companies to allocate markets.

Advocate Michael Hellens SC said this cannot have been the intentions of lawmakers‚ saying the new laws have "not been thought through" properly.

Advocate David Unterhalter SC said the new amendments had created "a massive set of complicated issues".

Unterhalter said the Competition Commission’s leniency policy‚ which affords a self-confessed cartelist immunity from a fine for blowing the whistle on companies it colluded with‚ has been effective in exposing cartels‚ but holding directors and managers criminally liable is likely to have a chilling effect on the number of companies coming forward with information.

While the new laws state that competition authorities may recommend to the National Prosecuting Authority (NPA) that a person deserves leniency from criminal charges‚ the NPA may still choose to prosecute‚ Unterhalter said. "Prosecution authorities are independent‚" he added.

The Competition Commission could not be reached for comment.

TMG Digital