Tribunal Backs Sh287.9M Penalty in Steel Price-Fixing Scandal

The Competition Tribunal has rejected appeal by seven steel companies accused of engaging in cartel conduct to the detriment of consumers.

The Tribunal has upheld a decision by the Competitions Authority of Kenya (CAK) to impose a combined penalty of Sh287.9 million on the seven firms for colluding to fix prices, coordinating price adjustments and agreeing to limit imports of certain steel components.

Jumbo Steel Mills Limited, Corrugated Sheets Limited, Tononoka Rolling Mills Limited, Blue Nile Wire Products Limited, Devki Steel Mills Limited, Accurate Steel Mills Limited, and Nail and Steel Products Limited had sought to quash CAK’s decision delivered in August 2023.

“The Tribunal’s findings affirm the Authority’s unwavering commitment to protect Kenyan consumers and businesses from the damaging effects of cartel conduct,” said CAK director general David Kemei.

The CAK had in its 2023 ruling found that fourteen 14 steel companies had colluded to fix prices, thereby restricting competition and unfairly burdening consumers of key construction input.

Mr Kemei noted that price fixing and output restrictions inflate prices for consumers, stifle innovation, and hinder economic progress.

“The Authority will continue enforcing the law firmly and fairly to ensure that our markets work for all Kenyans,” he said.

Corrugated Sheets Ltd was fined the most at Sh86.9 million, followed by Tononoka Rolling Mills Ltd at Sh62.7 million and Devki Steel Mills Ltd at Sh 46.2 million.

Jumbo Steel Mills Ltd was fined Sh33.1 million, Accurate Steel Mills Ltd Sh26.8 million, Nail and Steel Products Ltd Sh22.8 million, and Blue Nile Wire Products Ltd Sh9.1 million.

CAK said its decision was based on based on a thorough review of evidence obtained through market intelligence and search and seizure operations at the companies’ premises.

The companies individually challenged the sanction at the Tribunal within the 30-day statutory timeframe, and in line with their right to appeal under section 40 of the Competition Act.

In their submissions, the firms challenged the Authority’s decision on both procedural and legal grounds, claiming that due process had not been followed.

However, the Tribunal found that the Authority had complied fully with the law, noting that the investigation and subsequent administrative action met the standards of Article 47 of the Constitution, the Fair Administrative Action Act, and the Competition Act.

The Tribunal concurred with the Authority’s Sh287.9 million total penalty imposed on the seven steel companies.

The Tribunal is an independent and quasi-judicial body which can, upon hearing appeals, confirm, set aside, or vary the Authority’s decisions.