Corporate News
Mr Wang’ombe Kariuki, the CAK director- general. PHOTO | FILE
By MUGAMBI MUTEGI, pmutegi@ke.nationmedia.com
In Summary
The competition regulator has drafted a law that will
see whistleblower companies and their directors get off with lighter
punishment for volunteering information that helps to break up cartels.
The Competition Authority of Kenya (CAK) says introduction
of this law, which is already in the Finance Bill 2014, will attract
informers that can help to bust unlawful business agreements between
cartels and other secretive pacts that facilitate anti-competitive
behaviour.
Whistleblowers whose evidence leads to the
successful termination of such agreements and punishment (fines and jail
sentences) of the participants will either get reduced fines or full
pardon.
“The Authority (CAK) may operate a leniency
programme where an undertaking that voluntarily discloses the existence
of an agreement or practice that is prohibited by the Competition Act
and co-operates…in the investigation of the agreement may not be subject
to all or part of a fine…” the Finance Act 2014, which is awaiting the
third reading in Parliament, reads in part.
The competition regulator is hoping that
introduction of the clause in Kenya’s competition laws will help to
speed-up adjudication of ongoing and future cases.
The Consumer Federation of Kenya (Cofek), for
instance, has accused commercial banks of engaging in cartel-like
behaviour while pricing their loans and financial services and
short-changing customers.
CAK is currently investigating this particular case
to determine if there is undue concentration of market power in the
banking sector, with its recommendations promising to have far-reaching
implications on the industry.
A recent study commissioned by the authority shows
that the Kenya Tea Development Agency (KTDA) unilaterally serves 65
small-scale tea factories in the country for 14 years, dictating prices
and auction commissions.
“Where there is a near-natural monopoly such as
KTDA, there is need to regulate. There is an urgent need to govern
payment to farmers for green leaf by the factories,” a report quoted by
the Daily Nation on Friday read in part.
The Authority is also currently investigating
Lafarge for possible manipulation of cement prices, a charge that the
global manufacturer which has significant ownership in two Kenyan
companies has denied.
Mr Wang’ombe Kariuki, the CAK director- general,
said the authority’s board has already signed off on the regulations to
guide the program and are just awaiting the amendment in the law.
“The settlement policy we have drafted includes
offering leniency to the directors of companies who come forward
individually or as a group to report on cartels or unlawful business
pacts,” Mr Kariuki told the Business Daily on Friday.
CAK is borrowing the leniency model from countries
like South Africa and the United Kingdom where similar programmes has
yielded significant results since their introduction.
The Competition Commission in South Africa
introduced the Corporate Leniency Policy (CLP) in their laws in 2004 and
in the past three years alone, this programme has seen them collect
Sh3.5 billion in penalties.
No comments :
Post a Comment