“The biggest worry is reputational risk. No one knows who sat round the table and what they said as they divvied up those various construction contracts. This is going to be harder to overcome, more so than the financial damage and I still think we’re battling with it,” Sasfin’s Shapiro told CNBC Africa on Thursday.
“I’ve said openly, I think we need a truth and reconciliation committee to actually find out what happened and what the competition commission found that can help restore confidence in these construction companies.”
Construction groups reached a 1.46 billion rand settlement over bid rigging following the fining of 15 companies for collusion. The revelation blemished a number of names in the construction sector.
While only 55 out of 35,000 contracts were found to be tampered with, Shapiro feels that more needs to be known about the findings.
“Which contracts were they, were they the big ones or small ones? Was it the Durban stadium or the Cape Town stadium? We need that to be exposed. When that’s exposed we can say this is nothing. We need more detail,” he said.
He also insisted that these companies are well run but details about their spending, at the moment, needs to be revealed to restore confidence in them.
“They were huge fines but I don’t think those will collapse the companies. What I’m worried about is more the actual spend that’s taking place and we need consistency and we need to know that that’s being done,” he said.
“The other issue is Australia – so many of our companies have got big contracts in Australia and as we know, Australia is coming under a lot of pressure as China slows down and the commodity boom there also starts to slow down. I think there are worries about the Australian economy.”