Steel maker Tononoka Rolling Mills has faulted the competition watchdog for linking it to price-fixing, claiming that there was no evidence to support the allegations.
Tononoka said in submissions in the High Court that the findings of the Competition Authority of Kenya (CAK) failed to prove the existence of any price-fixing agreement.
The CAK in August 2023 slapped nine steel makers, including Tononoka, with a fine of Sh338.8 million for allegedly fixing prices, restricting output and revising product sizes. Tononoka was fined Sh62.72 million over the price-fixing claims.
The firm challenged the findings, but its case was dismissed by the Competition Tribunal in July last year, prompting it to escalate the matter to the High Court.
Tononoka told the High Court that the CAK findings of price-fixing and output restriction were not supported by sufficient or admissible evidence.
“The respondent failed to establish the essential ingredients required under Section 21 of the Act, including the existence of any agreement, concerted practice, or decision with the object or effect of preventing, distorting, or lessening competition,” the firm said. The company further stated that it was not allowed to challenge the evidence relied upon by CAK through cross-examination of the persons who prepared the Market Intelligence Report and those who conducted the search and seizure at its premises. The case will be mentioned on June 10. Tononoka Rolling Mills wants the court to determine, among other things, whether the findings of price fixing and output restriction were supported by sufficient evidence, including whether the Tribunal erred in its evaluation of the evidence and in upholding liability against it.
“There is no evidence to show that the appellant stood in a relationship of actual or potential competition with the alleged parties, or that its conduct displaced independent competitive behaviour in the market,” said the firm.
It added that to compound the procedural defect, some of the very individuals who conducted the search and seizure also sat as members of the adjudicative panel, thereby rendering any meaningful cross-examination not only impracticable but also impossible.
“The issue, therefore, is not whether the respondent (CAK) had the power to investigate, charge, and adjudicate, but whether, in exercising those powers, it respected the appellant’s constitutional right to a fair and impartial hearing. Where the same individuals investigate a matter, formulate charges, control the evidence, and then sit in judgment over the same matter, the process inevitably creates an appearance of bias and lack of impartiality,” the company said.
Evidence tabled in court showed that CAK commenced industry-wide investigations into the steel sector in September 2020 on the suspicion of coordinated conduct by members of the steel manufacturing and distribution sector in breach of statute and regulations.
And after the investigations, CAK gave its verdict in August 2023, principally finding that the steel maker’s conduct with other manufacturers constituted an infringement of section 21(1) as read together with Section 21(3)(a) of the Competition Act, which prohibits any agreement, decision or concerted practice that directly or indirectly fixes the purchase or selling process or any other trading conditions.
The firm said it remains difficult to explain how CAK concluded that there was a horizontal relationship, having failed to establish that all key players or stakeholders in the steel manufacturing and distribution sector were involved in the alleged price-fixing agreements or arrangements.
