PHOTO: FILE
One of the directors of two construction companies accused of cartel conduct has entered a plea of not guilty at the Auckland District Court.
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The lawyer for the other company director requested additional time before his client’s plea, which was granted by Judge Claire Ryan. The defendant will now enter their plea on March 14.
A ‘cartel’ is defined as two or more businesses agreeing not to compete, which includes bid rigging. For example, two companies could agree that, if one makes an inflated bid for a project, the other could make a slightly lower offer, and potentially win it with a higher margin. The favour could then be reciprocated at the next opportunity.
These charges, brought forth by the Commerce Commission last December, mark the first instance of criminal charges for cartel conduct in New Zealand since the law changed in 2021.
The allegations involve bid-rigging of publicly-funded contracts in Auckland. Both construction companies and their directors are accused of colluding to manipulate bids for infrastructure projects in the area.
During their initial court appearance, Judge Ryan granted interim name suppression for both companies and their directors.
Cartel conduct, defined as businesses agreeing not to compete, including bid rigging, is a serious offense. Under the Commerce Act, individuals found guilty of participating in a cartel could face fines of up to $500,000 and up to seven years in prison.
Commerce Commission chair John Small emphasized the harm cartel conduct inflicts on fair competition and the economy. He stressed the importance of criminalizing such behavior to protect taxpayers and ensure fair prices and quality services.
Alan Pollard, chief executive of Civil Contractors New Zealand, expressed hope that these charges would deter other businesses from engaging in cartel conduct, which undermines fair competition and affects project costs for clients.
The defendant who pleaded not guilty will appear for a case review at the Auckland District Court on April 26.
SOURCE: NEWSHUB