MyCC PENALISES EIGHT ENTERPRISES FOR BID RIGGING CARTEL

KUALA LUMPUR, 28 FEBRUARY – The Malaysia Competition Commission (MyCC), an agency under the Ministry of Domestic Trade and Costs of Living (KPDN), issued an Infringement Decision yesterday on 27 February 2025 against eight (8) enterprises for infringing section 4 of the Competition Act 2010 (Act 712) by participating in a bid rigging cartel in relation to two (2) tenders of the Public Works Department (JKR) namely Central Spine Road; Pakej 3: Gua Musang Kelantan ke Kg Relong, Kuala Lipis Pahang Seksyen 3B dan 3C KM 180.5 FT08 ke Bulatan Gua Musang (TENDER CSR: 3B & 3C) and Central Spine Road Pakej 3: Gua Musang Kelantan ke Kg Relong, Kuala Lipis Pahang Seksyen 3J Kampung Seberang Jelai ke Kg Relong (TENDER CSR: 3J) and one (1) tender under the Department of Drainage and Irrigation (JPS) namely Rancangan Tebatan Banjir Sungai Buloh, Selangor Darul Ehsan (TENDER RTB: SG BULOH), worth around RM474 million in 2019.

The infringing enterprises are as follows: -

Timeline of investigation, representation and decisions

MyCC initiated a formal investigation in response to a complaint concerning alleged bid rigging in the tender of CSR: 3B & 3C, and CSR: 3J. During the investigation into both tenders, MyCC found that the same enterprises were also engaged in bid rigging activities in TENDER RTB: SG BULOH. In this regard, MyCC conducted dawn raids, collected statements, requested information and performed multiple in-depth analysis of the relevant evidence. On 22 April 2024, MyCC issued a Proposed Decision to the 8 enterprises and subsequently received their representations. After thoroughly reviewing these representations, MyCC issued an Infringement Decision against all 8 enterprises on 27 February 2025.

Cartel behaviours by the enterprises

MyCC, in its investigation, found that the modus operandi employed by the cartel group was masterminded by Mangkubumi Sdn. Bhd. (Mangkubumi) and the operation was centralised at Pintas Utama Sdn. Bhd. (Pintas Utama). In fact, during the raid by MyCC, almost all the evidence was found at Pintas Utama’s premises.

The investigation found that the arrangement to bid the tender by the enterprises was conducted through information sharing via emails, meetings and preparation of physical tender documents mainly at Pintas Utama’s premises. This modus operandi was adopted by the cartel group throughout these three projects.

MyCC also discovered that as soon as IDX Multi Resources Sdn. Bhd. (IDX Multi Resources) was awarded the project for TENDER CSR: 3B & 3C and Menang Idaman Sdn. Bhd. (Menang Idaman) was awarded the project for TENDER CSR: 3J, they then subcontracted both tenders to Mangkubumi. Further to this arrangement, Mangkubumi was to act as the main contractor on behalf of IDX Multi Resources and Menang Idaman and subsequently subcontract these projects to another enterprise, namely YCH Sdn. Bhd. (YCH). However, in the TENDER RTB: SG BULOH project, MyCC found that IDX Multi Resources, upon being awarded the project, subcontracted this project directly to YCH.

Financial Penalty

Act 712 allows MyCC to impose a financial penalty of not more than 10% of the worldwide turnover of the enterprises. Based on MyCC’s calculation which took into account aggravating and mitigating factors, the eight infringing enterprises have been imposed a total financial penalty of RM92,876,078.90, with the breakdown as follows:

In the Budget 2025 speech tabled in Parliament on 18 October 2024, the government announced an increased allocation for MyCC, resulting into RM27 million budget for MyCC, with the objective to strengthen its efforts in cracking down cartels. In line with this mandate and the spirit of Malaysia MADANI, MyCC stands resolute in its mission to eradicate devious cartel practices, particularly bid rigging, which undermines the integrity of public procurement.

“Bid rigging distorts the procurement process, leading to inflated costs that ultimately burden the rakyat as well as the government. This is why, in addition to today’s decision, we are currently investigating 13 bid-rigging cartels involving 561 enterprises across tenders worth RM2.37 billion. Furthermore, we are assessing complaints related to 463 enterprises linked to tenders valued at RM9.27 billion,” said Iskandar Ismail, Chief Executive Officer of MyCC.

“Cartel is the supreme evil of competition law. In this fight against bid rigging cartels, we commend the Ministry of Finance and the Ministry of Works for their cooperation and commitment in standing with us against these intolerable activities. We urge other ministries and agencies to follow their example. If any government body suspects bid rigging in its tendering processes, we strongly encourage them to step forward and collaborate with MyCC,” he added.