What you need to know:
- Fourteen sheets were procured for either of the two complaints received and were referred to TBS laboratories for testing. In each case, nine sheets failed to meet standards set for 30-gauge sheets
Dar es Salaam. The Fair Competition (FCC) Commission has potentially uncovered an elaborate fraud involving roofing iron sheets mainly used in home construction.
The FCC has provisionally imposed hefty fines on some manufacturers and distributors for flouting quality standards related to the thickness, coating and marking of 30-gauge roofing sheets.
The FCC published its provisional findings on its website last month and the commission has invited members of the public to air their views before embarking on the next phase of investigations.
“With the provisional findings having been published, stakeholders can now submit their opinions before the respondents are summoned for an oral hearing. All these processes are part of our investigations,” FCC compliance director Magdalena Utouh told The Citizen.
She said the FCC would come up with the final verdict after hearing and weighing the respondents' defence.
“If the respondents are not satisfied with the commission's final findings, they will be free to lodge an appeal with the Fair Competition Tribunal,” Ms Utouh added.
The issue of roofing iron sheets purported to be 30-gauge, but which are of dubious quality, composition, brand and gauge dates back to September 2020 when the FCC received a complaint from Aluminium Africa Limited (Alaf).
FCC collaborated with the Tanzania Bureau of Standards (TBS) in investigating the matter.
The investigations – conducted between April and August 2021 – involved a total of 28 corrugated roofing iron sheets that were purchased as samples to verify claims in two separate complaints.
Fourteen sheets were procured for each case and referred to TBS laboratories for testing. In each case, nine sheets failed to meet standards set for 30-gauge sheets.
According to the provisional findings, which according to Ms Utouh are subject to possible review depending on the final findings, Priscus Alexander Company Limited, Kiboko Precoated Sheets Limited, Jackline Constantine Mallya, Tantu Building Material Company Limited and Urhome Company Limited could pay up to Sh15.087 billion in fines.
In the provisional findings dated February 6, 2023 and published on the FCC’s website on November 15, 2023, a four-member bench said the five respondents had misled the public as to the characteristics and suitability of the roofing sheets in question.
“This is contrary to Section 18 of the Fair Competition Act (FCA)...infringements under Section 18 of the FCA touch on infringement of consumers’ rights to sustainable shelter,” reads part of the provisional findings by the FCC bench chaired by Dr Aggrey Mlimuka and which had Dr Godwin Osoro, Mr Jenard Bahati and Mr William Erio as members.
“Considering the gravity of the offence and in the absence of the aggravating factors provided under Procedure 32 of the Consumer Procedures, a fine of five percent of annual turnover has been proposed."
The FCC thus proposed that Urhome Company Limited should pay a Sh9.089 billion fine, which is equivalent to five percent of the company’s Sh184.785 billion annual turnover as per financial statements audited in September 2021.
It was also proposed that Tantu Building Material Company Limited should pay Sh1.072 billion in line with the firm's Sh21.447 billion annual turnover, while Ms Jackline Constantine Mallya should pay Sh390.573 million based on a Sh7.811 billion turnover.
Kiboko Precoated Sheets Limited was provisionally fined Sh3.208 billion from its Sh26.535 billion turnover, according to the 2021 audit, while it was proposed that Priscus Alexander Company Limited should pay Sh1.327 billion in line with the firm's turnover of Sh26.535 billion according to the 2020 audited financial statements.
A report by TBS report shows that in order for the IT5 roofing sheets to qualify as 30-gauge, their thickness is supposed to range from 0.225mm to 0.275mm.
The FCC ruling says the roofing sheets did not conform to the minimum requirements of thickness, top coating colour, primer properties, bottom colour properties, gauge markings, manufacturer's name/trademark, batch identifications and coating class markings as required under compulsory standards.
“Misleading or deceptive conduct is when a business makes claims or representations that are likely to create a false impression in consumers as to the price, value or quality of goods or service on offer,” the ruling says in part.
“It is against the law for businesses to make misleading representations about their goods or services. This means businesses are not allowed to make false statements that are incorrect and that are likely to create false impressions."