New Zealand’s Criminal Cartel Regime
Lessons from the MaxBuild and Mardom prosecutions
While New Zealand’s criminal cartel regime has been in effect since 2021, it has only recently moved beyond theory into action.
The Commerce Commission has now completed the country’s first criminal cartel prosecution with two sentences imposed in the High Court in Auckland on construction companies MaxBuild Limited (MaxBuild) and Mardom Limited (formally Chelsea Contracting Limited) (Mardom), with both companies pleading guilty to bid-rigging offences.
This enforcement marks a watershed moment for competition law in New Zealand, and sends a clear message to all businesses engaged in tendering, procurement and competitor interaction.
Criminal conduct
The prosecutions arose from alleged bid-rigging in relation to NZ Transport Agency’s Northern Corridor Improvement Project and Auckland Transport’s Middlemore Bridge Refurbishment Project; two publicly funded infrastructure projects.
The commission’s investigation revealed that MaxBuild’s director, Munesh Kumar, colluded with Mardom’s director, Dominic Sutherland, by agreeing that Mardom would submit artificially high tenders (‘cover pricing’) to allow MaxBuild to win the contracts with lower bids. This practice undermines competitive tendering, harms procuring agencies and potentially loads costs onto taxpayers.
The scheme was accidentally uncovered when a spreadsheet containing details of the illicit arrangement was inadvertently included in tender documents sent to the project’s overseers. This triggered a formal commission investigation and, ultimately, criminal charges.
Sentencing
In December 2024, the High Court sentenced MaxBuild’s director to six months’ community detention and 200 hours’ community service, and ordered a $500,000 fine on MaxBuild for its role in facilitating the cartel conduct. Justice Wilkinson-Smith described the behaviour as ‘serious and deliberate,’ and an attack on business confidence and taxpayer trust.
More recently, in October 2025, the High Court imposed a $30,000 fine on Mardom following its guilty plea to cartel conduct.
Justice Sally Fitzgerald indicated that a starting fine of $595,000 would have been appropriate for Mardom, but the fine was lowered to $30,000 due to Mardom’s poor financial position and lack of active trading. Despite not directly benefiting financially from the scheme, the company had ‘taken active steps in the collusive behaviour.’
In both prosecutions, mitigating factors such as early guilty pleas, cooperation, personal circumstances and the inability to pay influenced the level of penalties imposed.
Why this matters for New Zealand businesses
Under New Zealand law, intentional cartel behaviour – including price-fixing, market allocation, restricted output arrangements and bid-rigging – can attract:
• Up to seven years’ imprisonment (for individuals), and/or fines of up to $500,000, and
• Substantial corporate fines (up to the greater of $10 million, three times commercial gain or 10% of turnover for each year in which a breach occurred).
The cases of MaxBuild and Mardom demonstrate that:
• The commission will deploy criminal powers when warranted – not just civil penalties
• Bid-rigging and cover pricing are key priorities, particularly in public-sector procurement
• Individuals face personal exposure, with directors who engage in or facilitate cartel conduct risking criminal convictions and custodial sentences, and
• Early guilty pleas and cooperation can reduce sentences, but they do not prevent convictions.
Lessons for business
• Train your staff on ‘informal’ competitor contact. Conversations about pricing, bid strategy, territories or customers with competitors can be high-risk
• Establish compliance programmes for your tender applications and keep them updated. Any coordinated arrangements with competitors about bidding practices can easily amount to cartel conduct. Include cartel law training, procurement protocols and escalation points for suspected breaches, and
• Be proactive if you suspect there has been a breach. The commission’s Cartel Leniency and Immunity Policy can be a way to mitigate exposure if cartel conduct is disclosed early.
Cartel conduct will be pursued aggressively
The commission’s prosecutions of MaxBuild and Mardom represent a tipping point in New Zealand’s competition law enforcement. It underlines that cartel conduct, particularly in tender processes involving public funds, will be pursued aggressively, with potential criminal consequences.
For businesses operating in competitive markets, strong competition law governance is essential to protect legal, financial and reputational risk.
If you are unsure about any aspect of competitive commercial tenders, please contact us at the earliest opportunity.
DISCLAIMER: All the information published is true and accurate to the best of the authors’ knowledge. It should not be a substitute for legal advice. No liability is assumed by the authors or publisher for losses suffered by any person or organisation relying directly or indirectly on this article. Views expressed are those of individual authors, and do not necessarily reflect the view of this firm. Articles appearing in this newsletter may be reproduced with prior approval from the editor and credit given to the source. Copyright, NZ LAW Limited, 2019. Editor: Adrienne Olsen. E-mail: adrienne@adroite.co.nz. Ph: 029 286 3650 or 04 496 5513.