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Eye on bid-rigging in govt tenders


In the spotlight: Iskandar said some bidders would also work in unison to ensure they took turns to win a tender and keep outsiders out of their cartel.

KUALA LUMPUR: Malaysia’s anti-monopoly authority, which has slapped over RM160mil in penalties against companies, is now focusing its investigations on bid-rigging in government tenders worth billions of ringgit.

“We have been working with several government bodies such as the Finance Ministry, and the latest being the Malaysian Anti-Corruption Commission (MACC), to weed out such malpractices, ” said Malaysia Competition Commission (MyCC) chief executive officer Iskandar Ismail.

“It’s a two-pronged approach with the same aim. Our role is to help the agencies to be aware and not to be an unknowing party to such cartels, ” he said in an interview.MyCC has initiated action against eight information technology companies that were allegedly involved in a tender exercise of a government agency.

The powerful anti-cartel regulator, which turns 10 on April 1, is under the auspices of the Domestic Trade and Consumer Affairs Ministry.

It is the country’s first enforcement authority that acts as a quasi-judicial body with powers to investigate and prosecute at the same time.

Explaining MyCC’s move to train its guns on preventing bid-rigging, Iskandar said it wanted a buy-in from government bodies to prevent bid-rigging in the tender process and help them detect such a cartel.

It would be the role of the MACC if there were any corrupt activities involved between the individuals and tender participants, he said, adding that on MyCC’s part, it would focus on companies that colluded with each other to rig the tender.

For example, he said that the same person could be submitting for the same tender under 10 different companies.

Some were so obvious that the “mistakes and forged signatures were identical”, he added.

Iskandar said that some bidders would also work in unison to ensure they took turns to win a tender and keep outsiders out of their cartel.

“As of now, we have investigated hundreds of enterprises and associations, ” he said.

“From there, we produced many decisions, undertakings, warnings, directives and other resolutions.”

Over the past two years, MyCC has carried out a number of advocacy and training programmes for government agencies on how they could stop leakages by detecting bid-rigging.

Since 2014, MyCC has slapped over RM160mil in penalties against companies for wide-ranging offences.

One of its landmark actions was its move against Malaysia Airlines, AirAsia and AirAsia X for entering into an agreement on sharing markets in the air transport sector within Malaysia.

Iskandar said the Court of Appeal had fixed April 27 to decide on the case to challenge its decision, including the RM10mil fine by MyCC against each air carrier.

Another major case involved MyCC’s decision against MyEG Services Bhd, which provides online foreign workers’ permit renewals.

The company was fined RM9.4mil for abusing its dominant position, thereby infringing the Competition Act.

MyEG has taken the case to court, and currently has an ongoing hearing at the Court of Appeal.

But the biggest penalty is against PIAM (General Insurance Association of Malaysia) and its 22 members for allegedly entering into an agreement on the application of trade discounts on parts prices and hourly labour rates for motor vehicle repairs by workshops under a PIAM scheme.

MyCC directed the parties to cease and desist from carrying out the agreement and stated that discounts and rates were to be determined independently by individual insurers and workshops.

The 22 members of PIAM have been imposed a RM130mil fine.

The matter is now with the Competition Appeal Tribunal.

Interestingly, Bank Negara has expressed regret with MyCC’s action, saying the agreement was put in place through the facilitation and direction of the central bank.

MyCC had also fined Dagang NeXchange Bhd unit, Dagang Net Technologies Sdn Bhd, RM10.3mil for alleged abuse of its dominant position by engaging in exclusive dealing.

Dagang Net is the government’s sole service provider in the provision of online trade facilitation services for Sistem Maklumat Kastam under the National Single Window (NSW) project.

NSW is an electronic-based ecosystem that enables Customs-related documents and transactions to be transferred electronically between businessmen and Customs via a single point of entry.

Another bold action by MyCC was taken against Grab Holdings Inc, along with its subsidiaries GrabCar Sdn Bhd and MyTeksi Sdn Bhd.

According to MyCC, the ride-hailing company had allegedly abused its dominant position by imposing restrictive clauses on its drivers relating to the promotion of Grab’s competitors and transit media advertising.

Grab has sought judicial review and challenged MyCC’s action on the grounds that the commission does not have the jurisdiction to make such a move.

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