Competition Commission must account for R129 million in irregular expenditure

Issued by Michael Cardo MP – DA Shadow Minister of Economic Development
26 Sep 2018 in News

The Competition Commission must account for R129 million worth of irregular expenditure, amidst unanswered questions relating to maladministration and corruption at the regulator.

In the Competition Commission’s Annual Report for 2017/18, the Auditor-General found total irregular expenditure of R128 590 000 over the two previous financial years, including amounts of:

  • R745 000, the details of which were not provided, that resulted in a forensic investigation and a fraud case being opened; and
  • R40m in 2017 and R86m in 2018 related to contravention of the regulations for supply chain management, for costs incurred on forensic, economic and legal experts utilised on cases.

These findings come hot on the heels of my letter to Economic Development Minister Ebrahim Patel in July, in which I asked him to establish a commission of inquiry to investigate:

  •  The Commission’s favouring of 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, Antony 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 eighteen months, raking in over R10 million for work on cartel cases alone (63% of all such expenditure by the Commission);
  • Potential conflicts of interest among members of the Commission’s Executive Committee; and
  • The purported use of VIP security protection for members of the EXCO, including the Commissioner, the Deputy Commissioner, the Divisional Manager of Cartels and the Chief Financial Officer; and

To date, I have still not had a formal written response to my request.

It is clear that a murky cloud hangs over the Competition Commission’s financial and administrative probity, with flagrant violations of regulations for supply chain management, and Minister Patel need to establish a commission to investigate these serious matters forthwith.