Outcome of cases heard by the Tribunal - 4 December 2019
Type of matter
Commission’s recommendation to the Tribunal
Competition Commission and Stuart Graham Furnishing Fabrics CC
Confirm as an
Competition Commission and Senwes Limited and Tradevantage Grains (Pty) Ltd
Confirm as an
Exxaro Resources and Cennergi (Pty) Ltd
Approve without conditions
Approved without conditions
Tribunal approves settlement between Commission and fabrics company accused of
minimum resale price maintenance
The Tribunal has confirmed, as an order, a settlement agreement between the Competition Commission and Stuart Graham Furnishing Fabrics (Stuart Fabrics).
In terms of the agreement, Stuart Fabrics admits that it engaged in the practice of minimum resale price maintenance and has agreed to pay an administrative penalty of R150 000.00 (one hundred and fifty thousand rand).
The matter stems from a complaint lodged with the Commission by Sandton Fabrics in November 2015 in relation to Stuart Fabrics’ pricing policy. The Commission found, among others, that Stuart Fabrics – which supplies fabrics to retailers across the country - had demanded that Sandton Fabrics increase its prices by at least 50% or its account would be terminated.
In terms of the settlement, Stuart Fabrics has agreed to implement and monitor a competition law compliance programme incorporating corporate governance. This is designed to ensure that its employees, managers and agents do not contravene the Competition Act in future.
Although Stuart Fabrics has been sold to another company, legal representatives confirmed to the Tribunal that it would still be in a position to pay the administrative penalty. In addition, the new purchaser has been supplying Sandton Fabrics.
The Commission confirmed that several mitigating factors had been considered when it negotiated the penalty amount, including the fact that Stuart Fabrics’ conduct was not widespread and that it had been an isolated incident. The company had also readily admitted to the contravention and had fully cooperated with the Commission.
Agri companies admit to technical contravention of consent order resulting from
sunflower seed transaction
The Tribunal has confirmed a settlement agreement between the Competition Commission and agricultural company, Senwes Limited and its subsidiary, Tradevantage Grain.
In the agreement, Senwes and Tradevantage acknowledge a once-off technical contravention of a 2013 consent order (between the Commission and Senwes) and admit to the exchange of information. This occurred during a transaction in which Tradevantage won a Farmwise tender to acquire sunflower seeds from Farmwise.
The companies claimed that Farmwise struggled to provide Tradevantage with an “account number” (under which the sunflower seeds were stored at Senwes) required by Tradevantage to pay for the sunflower seeds.
Correspondence between employees subsequently involved a Tradevantage administrative employee requesting information from Senwes regarding the storage and existence of the sunflower seeds. This had ultimately constituted the contravention.
The companies – along with the Commission – have also agreed to amend certain clauses of the Consent Order to resolve any ambiguity around the composition of the board of Tradevantage.
The Commission has not sought an administrative penalty against Senwes and Tradevantage.
Tribunal approves merger giving Exxaro sole control over Cennergi JV
The Tribunal has unconditionally approved the large merger whereby Exxaro Resources Ltd (Exxaro) intends to acquire Cennergi (Pty) Ltd.
Exxaro, a public company listed on the JSE, owns and controls various firms in the coal, base metals, titanium dioxide, ferrous and energy industries.
Cennergi produces electricity using wind turbines. The electricity is supplied to Eskom in accordance with a 20-year power purchasing agreement.
Cennergi was formed in 2012 as a Joint Venture between Khopoli and Exxaro, to take advantage of opportunities brought about by the government’s Renewable Energy Independent Power Producer Procurement Program.
Cennergi is jointly owned by Exxaro and Khopoli Investments Ltd, a wholly owned subsidiary of Tata Power Company Ltd which is a public company incorporated in accordance with the laws of India.
This transaction constitutes a shift from joint to sole control, with Exxaro acquiring the remaining interest in Cennergi from Khopoli. The transaction presents no competition or public interest concerns.
Gillian de Gouveia
Tel: +27 (0) 12 394 1383
Cell: +27 (0) 82 410 1195
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