Price Fixing Charges For Ronovationz
The Commerce Commission is taking property investment guru Ron Hoy Fong’s company to court over allegations of price fixing.
1 August 2019
After a long investigation, the Commission recently filed High Court proceedings against Ronovation Limited for price fixing in Auckland’s residential real estate market.
Ronovation, trading as Ronovationz, was set up in April 2009. It advises its members on how to acquire and improve investment properties in Auckland and by March 2018 it had more than 400 paid members.
However, the company ran into problems back in May 2017 after a furore erupted over a tutoring video by owner Ron Hoy Fong became public.
The video showed Fong coaching investors to give vendors false names, work in packs to drive down prices and target desperate families or “dummies” who don’t know the value of their home.
At the time, Fong denied exploiting people and said nothing he advocated was illegal.
But the video prompted Labour Party MP Michael Wood to lay a complaint with the Commerce Commission and this led to an investigation.
Now the Commission alleges that Ronovation had rules which prevented Ronovationz members from competing for properties.
The Commission alleges these rules, which applied between September 2011 and September 2018, amounted to cartel conduct in breach of the Commerce Act.
It said in a statement that the Commerce Act bans arrangements which have the effect of fixing prices as well as agreements not to compete at auctions or on tenders which is known as “bid rigging”.
“Bid rigging occurs when there is an agreement among some or all of the bidders about who should win a tender or auction. Bid rigging is a form of cartel conduct and is prohibited by both the former and current section 30 of the Commerce Act.” The Commission and Ronovation have entered into a settlement to resolve the proceedings and a penalty hearing is pending.