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AFR
AFR
AFR - AFGRI Limited - AFGRI settles with Competition Commission regarding Grain
Silo Industry investigation.
AFGRI Limited
(Incorporated in the Republic of South Africa)
Registration number: 1995/004030/06
ISIN: ZAE000040549
Share Code: AFR
("AFGRI")
AFGRI settles with Competition Commission regarding Grain Silo Industry
investigation.
AFGRI Operations Limited ("AFGRI") is pleased to confirm that it has reached a
settlement with the Competition Commission ("the Commission") on Friday
regarding a complaint initiated by the Commission that AFGRI, as one of the
members of Grain Silo Industry (Proprietary) Limited ("GSI"), had contravened
section 4(1) (b) (i) of the Competition Act, 1998 by collectively participating
in the determination of the South African Futures Exchange`s ("SAFEX`s") daily
grain storage tariffs ("SAFEX tariffs") via its membership of GSI. The
Commission`s investigation focused on the historic recommendation by members of
the GSI to SAFEX of a uniform daily grain storage tariff at the request of
SAFEX. AFGRI cooperated fully and voluntarily with the Commission during the
Commission`s investigation.
The Commission also investigated an alleged contravention of section 8(a) of the
Competition Act, 1998 and found that AFGRI had not excessively priced any grain
storage tariff or any other related products or services which were under
investigation by the Commission.
In terms of the settlement, AFGRI agreed to pay an administrative penalty of
R15.6 million. The terms of the settlement are subject to confirmation by the
Competition Tribunal. The amount of the penalty has been fully provided for by
AFGRI.
Reacting to the settlement, AFGRI CEO Chris Venter said, "We are satisfied with
the outcome of the settlement negotiations which have brought finality to the
Commission`s investigation. The investigation relates to historic conduct which
ceased some time ago. AFGRI had stopped recommending SAFEX tariffs through the
GSI before the Commission`s investigation had commenced. AFGRI conducted its own
internal investigation which confirmed that at no time did AFGRI act with
knowledge of unlawfulness."
Venter went on to say, "We respect the Commission`s finding that the
recommendation of the SAFEX tariffs technically constituted a contravention of
the Competition Act. The recommendation of the SAFEX tariffs was done at the
request of SAFEX and on the bona fide understanding that it was crucial for the
proper functioning of SAFEX that there were uniform daily grain storage tariffs.
The SAFEX tariffs enable traders to calculate the maximum amount of storage
charges applicable on a particular SAFEX transaction".
The AFGRI Board remains committed to complying with all applicable laws
including the Competition Act, 1998 and does not condone any anti-competitive
behaviour. AFGRI has a formal Competition law compliance programme in place
which is implemented throughout the Group. AFGRI`s existing compliance programme
will be enhanced with a formal compliance programme as prescribed by the
Commission as part of the settlement with the Commission.
6 June 2011
Sponsor: Investec Bank Limited
Date: 06/06/2011 07:30:00 Produced by the JSE SENS Department.
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