The High Court has sentenced Max Kumar to six months' community detention, 200 hours' community work, and fined his company $500,000 (file image). Photo: RNZ / Simon Rogers
- Company director gets community detention and work for bid rigging
- Max Kumar pleaded guilty to rigging bids for transport projects
- Judge says it would have been jail but for mitigating circumstances
- Commerce Commission says first criminal case for cartel behaviour sends message
An Auckland company director has escaped a jail sentence for rigging contracts in the country's first criminal cartel case.
The High Court has sentenced Max Kumar to six months' community detention, 200 hours' community work, and fined his company $500,000 for bid rigging of transport contracts in Auckland in early 2022.
Justice Michele Wilkinson-Smith described the conduct as "serious and deliberate", which struck at the heart of business confidence, and was a "deliberate and concerted strategy to rig bids for financial gain".
The Commerce Commission which brought the case said the prosecution and sentence showed its determination to pursue offending.
"The sentencing today sends a strong message to businesses that the Commission will not tolerate cartel conduct, and we are prepared to lay criminal charges to enforce the law," chairperson John Small said.
"Bid rigging of publicly funded contracts loads extra costs onto taxpayers and the New Zealand economy as conduct of this type undermines fair competition. The criminalisation of cartel conduct in 2021 underlines just how serious and harmful this offending is."
A lifeline
Kumar released a statement after sentencing saying that he took full responsibility for his actions, which were driven by serious financial pressures on his firm, MaxBuild caused by the pandemic.
"There was a three or four-month period where I found myself consumed by the fear of needing to let people go - good people, that have worked for us and been loyal for years.
"So, when tenders finally emerged after lockdown, they seemed to represent the lifeline we desperately needed and, blindly, I thought might solve all our problems," Kumar said.
He said he contacted a colleague in the industry, who agreed to pitch higher priced tenders for Auckland's Northern Corridor Improvement Project, and refurbishment of Middlemore Bridge.
"I truly believe our own tender pricing was fair and reasonable as the baseline. I wasn't trying to rip anyone off or unfairly profit, but to improve our chances to get the work," Kumar said.
He did not realise that what he was doing was bid rigging and was illegal.
Kumar said he had tried to make reparations but they had been refused, and was willing to work with the regulator to educate the industry.
A second company and its director are due to face trial in October next year in relation to the same cartel conduct.