Cape Gate says Competition Commission raid based on ‘unlawful’ warrant

Scrap steel producer Cape Gate says the Competition Commission (CompCom) carried out an unannounced raid on its premises on Friday as part of a wider inquiry into anti-competitive behaviour in the industry. The company says it has always cooperated fully with the commission and had previously made all requested documents and information available, adding that it takes its obligations to comply with the law seriously. Cape Gate says it will approach the Pretoria High Court on an urgent basis to set aside the warrant on which the raid was based.

“We are confident that our business practices are fully compliant with competition law. We strongly deny any wrongdoing,” says Cape Gate CEO Dorothea Ziegenhagen. The inquiry follows ‘unsubstantiated’ complaints made by a third party to the commission in 2023, says the company.

Last week the CompCom announced that it was conducting search and seizure operations at the premises of four scrap metal purchasing companies operating in Germiston, Nigel, Vanderbijlpark and Hammanskraal. The companies named as part of the investigation are Scaw South Africa, Cape Gate, Shaurya Steel (trading as Force Steels) and Unica Iron and Steel. “Scrap metal forms part of the industrial intermediary products, which is the commission’s priority sector,” said Commissioner Doris Tshepe in a statement. “Dismantling any alleged price-fixing cartel in the market will go a long way towards eliminating any existing artificial barriers to entry and creates a conducive environment for all firms, in particular small businesses and firms owned by historically disadvantaged persons, to enter and participate in the market.” Cape Gate argues that the warrant is unlawful and that it has a right to ask the court for its reconsideration, given that it was issued in its absence.