KUALA LUMPUR (Feb 28): The Malaysia Competition Commission (MyCC) is issuing a fine totalling more than RM92 million on eight firms for their alleged involvement in a cartel to rig three public construction tenders.
Under the infringement decision issued, Pintas Utama Sdn Bhd was slapped with the biggest penalty at RM48.64 million, followed by Mangkubumi Sdn Bhd at RM21.86 million, the agency said in a statement on Friday.
The other six firms are: Dutamesra Bina Sdn Bhd, IDX Multi Resources Sdn Bhd, Menang Idaman Sdn Bhd, Meranti Budiman Sdn Bhd, NYL Corporation Sdn Bhd, and Kiara Kilat Sdn Bhd.
“Bid rigging distorts the procurement process, leading to inflated costs that ultimately burden the rakyat as well as the government,” said MyCC chief executive officer Iskandar Ismail. “Cartel is the supreme evil of competition law.”
Under the Competition Act 2010, MyCC is allowed to impose a financial penalty of not more than 10% of the worldwide turnover of the enterprises.
The infringement finding follows a proposed decision issued in April 2024 against the eight enterprises. A firm can ask the Competition Appeal Tribunal to re-examine MyCC’s decision, and the last avenue for appeal would be to initiate a judicial review.
Modus operandi
The bid rigging concerned two tenders under the Public Works Department for construction work on the Central Spine Road project, and a tender under the Department of Drainage and Irrigation for flood mitigation works in Sungai Buloh worth RM474 million in 2019.
“MyCC, in its investigation, found that the modus operandi employed by the cartel group was masterminded by Mangkubumi and the operation was centralised at Pintas Utama,” MyCC said.
Investigation found that bidding for the tender was arranged through emails and meetings while the physical tender documents were prepared mainly at Pintas Utama’s premises, the agency alleged, noting that the “modus operandi was adopted by the cartel group throughout these three projects”.
IDX Multi and Menang Idaman each won one tender under the Central Spine Road project and both contracts were then subcontracted to Mangkubumi.
Mangkubumi, acting as the main contractor, subsequently subcontracted the projects to another enterprise YCH Sdn Bhd. Further, IDX Multi also subcontracted the flood mitigation project it won to YCH, which was not accused of any wrongdoing by MyCC.
Other investigations
MyCC is also investigating 13 bid-rigging cartels involving 561 enterprises across tenders worth RM2.37 billion and assessing complaints related to 463 enterprises linked to tenders valued at RM9.27 billion.
“In this fight against bid-rigging cartels, we commend the Ministry of Finance and the Ministry of Works for their cooperation and commitment in standing with us against these intolerable activities,” said MyCC’s Iskandar.
He also urged other ministries and agencies to follow their example. “If any government body suspects bid rigging in its tendering processes, we strongly encourage them to step forward and collaborate with MyCC,” Iskandar added.