Company says it has done nothing wrong and will approach the high court to have the warrant set aside
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.
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The inquiry follows ‘unsubstantiated’ complaints made by a third party to the commission in 2023, says the company.
Search and seizure operations
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.”
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Cape Gate claims warrant unlawful
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.
“There was a clear obligation on the commission to fully disclose all relevant facts to the court. Cape Gate believes that the commission failed to make full disclosure as required,” said the company.
In October 2025, Cape Gate was found guilty of price fixing by the Competition Tribunal.
This was over complaints made in the 2000s that some buyers of scrap metal were colluding to fix the price of scrap metal until 2008.
ArcelorMittal SA and Columbus Stainless, two of the companies named in that investigation, admitted liability and settled with the commission. Scaw was granted corporate leniency, while Cape Gate denied the allegations.
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The commission argued before the Competition Tribunal that the accused firms operated as a buyers’ cartel, using the same pricing formula and premium when buying scrap metal from scrap merchants.
Says Cape Gate: “In relation to the 2025 Competition Tribunal decision regarding scrap purchasing in the period 2000 to 2008, Cape Gate maintains its stance that the Tribunal’s judgment is incorrect and that there has not been contravention of the Competition Act. In this regard, Cape Gate has launched both review and appeal proceedings against the Tribunal’s decision, which are currently sub judice and will be heard in the Competition Appeal Court during the first quarter of 2026.”
Last week’s search and seizure operations followed a complaint made by a third party in 2023, and another by the CompCom commissioner in February 2026.
Cape Gate says it provides a livelihood to thousands in the steel industry, and is committed to responsible business practices in a sector that has been under severe economic pressure for years.
This article was republished from Moneyweb. Read the original here.
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