Economy

Watchdog seeks detectives to build competition cases

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Mr Wang’ombe Kariuki of Competition Authority of Kenya. Photo/FILE

The competition watchdog is seeking detectives to investigate and prosecute firms and directors as it steps up the fight against price fixing, abuse of market dominance and breach of merger rules.

The Competition Authority of Kenya (CAK) says that staff from the Directorate of Criminal Investigations will in the coming weeks be seconded to strengthen its investigations.

“The authority has seen the need to have police investigators on board as some of the cases are of criminal nature,” Wang'ombe Kariuki, the director-general of the authority told the Business Daily.

“We have had interactions with the DPP (Director of Public Prosecution) during which he advised us to get the investigators so that we can improve the quality of our investigations,” Mr Kariuki said.

Kenya created an independent watchdog in 2012 to fight price fixing, abuse of market dominance and those in breach of merger rules, replacing the Monopolies and Prices Commission.

Previously, market malpractices in Kenya attracted a maximum fine of Sh200,000 or a jail-term of up to three years for offending companies, a light sentence for firms which post annual turnovers of billion of shillings.

Currently, companies face a fine of up to Sh10 million and the CAK can also impose a financial penalty equivalent to 10 per cent of a firm’s sales. Directors of firms in breach face a jail-term of five years.

The need to have detectives attached to the CAK was triggered by the purchase of Synovate by Ipsos — which did not seek approval in the October 2011 acquisition that affected operations in four countries.

READ: Synovate directors risk jail, hefty fines

The watchdog has the mandate to review the impact of cross-border transaction on whether a deal will cause negative competition and hurt consumers.

Ipsos bought the entire stock of Synovate whose Kenyan unit remains the largest research firm in the country, exposing itself to regulatory action for failure to notify the CAK.

The authority has forwarded the matter to the DPP with a view to have Ipsos Kenya’s directors face court action.

But the DPP referred the matter to the Directorate of Criminal Investigations (DCI) to investigate the issue further, on grounds that the authority did have the capacity to investigate the Ipsos-Synovate deal.