Shipping boss irked by SA raid

The Mediterranean Shipping Company’s Captain Salvatore Sarno speaks out after a raid by SA’s Competition Commission.

|||

Durban - Prominent shipping company boss Captain Salvatore Sarno has spoken out about a raid by Competition Commission officials which lasted until midnight at some of the six targeted companies.

Speaking to the Daily News late on Wednesday night, Sarno, chairman of the Mediterranean Shipping Company (MSC), said he was angry at the person who led to “the disruptions of our working schedule” for the hours that it took for commission officials to conduct their searches at the various offices.

MSC is the second-biggest shipping company in the world, and the biggest in South Africa, moving all types of cargo internationally.

Sarno was still in his offices, burning the midnight oil, after the dramatic swoop by the commission on Wednesday following a tip-off from a whistle-blower on alleged collusion by certain companies in the shipping industry.

The firms raided were Hamburg Sud SA, Maersk South Africa, Safmarine, Mediterranean Shipping Company, Pacific International Line South Africa and CMA CGM Shipping Agencies South Africa.

The companies are suspected of engaging in collusive practices such as fixing the incremental rates for the shipment of cargo from Asia to South Africa in contravention of the Competition Act.

Sarno said: “With the shipping rates this low, and the fines imposed on companies involved in collusive practices, who would be so stupid to even think of looking that direction?

“I’m extremely angry. Whoever led to this, is stupid. The freight business is very low as it is, because consignment from South Africa is very low,” he said.

“Why risk business when a container is currently shipped at between $40 (R545) and $50? Collude and you get fined millions of rand, and how much profit have you made by those underhand techniques?

“I’m mad about this raid, but I must say the commission guys were professional. I really give them my respect in the way they conducted their business,” said Sarno.

He said because of the current low and slow freight volumes of the shipping business, “a number of companies” had gone bankrupt.

On Thursday morning, the rand traded at R13.63 to a US dollar.

“It is dangerous to be involved in illegal practices in this business. Anyway, I co-operated... They went through our electronic documents, including the emailing system.

“They didn’t find anything untoward in the way we conduct our business. They didn’t find anything that suggests we are involved in a cartel. We have also submitted everything they requested - nothing will be found,” said Sarno.

Last year a Japanese shipping company was fined R104 million by the commission after accepting guilt for colluding with other companies in transporting vehicles.

Other companies targeted in Wednesday’s raids could not be reached for comment.

The commission’s spokesman, Itumeleng Lesofe, said the search and seizure operation lasted from 9am to midnight at six offices in Cape Town and Durban. He said this was not the first time they had had complaints about these companies.

Lesofe said the Commission had not acted on previous “recurring” complaints due to lack of evidence. He said by law, the commission had a year to conduct its investigation. If there was collusion, it would refer the matter to the Competition Tribunal.

“This time, the information brought forward was compelling enough to raise reasonable suspicion. The Tribunal is empowered to impose a penalty of up to 10% of a company’s turnover,” he said.

“Price fixing is a criminal offence in South Africa so individuals directly involved face a fine of up to R500 000 or a period of imprisonment not exceeding 10 years,” said Lesofe.

* With additional reporting by Nosipho Mngoma

DAILY NEWS