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[2011] ZACT 29
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Competition Commission v Royal Bafokeng Holdings (Pty) Ltd and Others (39/X/May11) [2011] ZACT 29; [2011] 1 CPLR 118 (CT) (2 June 2011)
COMPETITION
TRIBUNAL
REPUBLIC
OF SOUTH AFRICA
Case No: 39/X/May11
In the matter between:
The
Competition Commission
…............................................................................
Applicant
and
Royal
Bafokeng Holdings (Pty) Ltd
…............................................................
1
st
Respondent
Mogs (Pty)
Ltd
….........................................................................................
2
nd
Respondent
Elbroc Mining
Products (Pty) Ltd
…...............................................................
3
rd
Respondent
Stope
Technology (Pty) Ltd
….......................................................................
4
th
Respondent
Pane!
: Y Carrim
(Presiding Member), A Wesseis (Tribunal Member), and M Mokuena
(Tribunal Member)
Heard on
:
02
June 2011
Decided on : 02 June 2011
Order
The Tribunal hereby confirms the
order as agreed to and proposed by the Competition Commission and the
respondent, annexed hereto
marked "A".
Y
Carrim
Presiding
Member
Concurring:
A
Wesseis and M Mokuena
Competition
tribunal
South
Africa
Notice of Motion
Date
17 May 2011
File_________________
To: The Register of the
Competition Tribunal
Concerning the matter
between:
COMPETITION COMMISION
(APPLICANT)
AND
ROYAL BAFOKENG HOLDING
(PTY) LTD & 3 (RESPONDENT)
Take notice that the
Application
intends to apply to the tribunal for th e
following order:
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA
Commission
Case No:2009 Mar4358
In
the matter between:
THE
COMPETITION COMMISSION
….........................................................
APPLICANT
And
ROYAL
BAFOKENG HOLDINGS (PTY) LTD
….................................
1
st
RESPONDENT
MOGS
(PTY) LIMITED
….......................................................................
2
nd
RESPONDENT
ELBROC
MINING PRODUCTS (PTY) LTD
…....................................
3
rd
RESPONDENT
STOPE
TECHNOLOGY (PTY) LTD
…..................................................
4
th
RESPONDENT
CONSENT
AGREEMENT BETWEEN THE COMPETITION COMMISSION AND ROYAL BAFOKENG
HOLDINGS (PTY) LTD, MOGS (PTY) LIMITED, ELBROC MINING
PRODUCTS (PTY)
LTD AND STOPE TECHNOLOGY (PTY) LTD IN REGARD TO A CONTRAVENTION OF
SECTION 13A OF THE COMPETITION ACT 89 OF 1998
(AS AMENDED)
The
Competition Commission and Royal Bafokeng Holdings (Pty) Ltd, Mogs
(Pty) Limited, Eibroc Mining Products (Pty) Ltd and Stope
Technology
(Pty) Ltd hereby agree that an application be made to the
Competition Tribunal for confirmation of the Consent Agreement
as an
order of the Competition Tribunal in terms of Sections 49D as read
with Sections
58(1
){b)
and
59(1)(d
)(i)
of the
Competition Act 89 of 1998
, as amended, on the terms set out
below:
1. Definitions
For the purposes of this
Consent Agreement the following definitions shall apply:
1.1.
"Act'
means
the Competition Act 89 of 1998 (as amended).
1.2.
"Commission"
means
the Competition Commission of South Africa, a statutory body
established in terms of Section 19 of the Act, with its principal
place of business at Building C, Mulayo Building, dti Campus, cnr
Meintjies & Essefen Streets, Pretoria, Gauteng.
1.3.
"Tribunal”
means
the Competition Tribunal of South Africa, a statutory body
established in terms of Section 26 of the Act with its principal
piace of business at Building C, Mulayo Building, dti Campus, cnr
Meintjies & Esseien Streets, Pretoria, Gauteng.
1.4.
"Consent
Agreement'
means
this written consent agreement duly signed by the Commission, RBH
and Mogs.
1.5.
"RBH"
means
Royal Bafokeng Holdings a private company which has its principal
place of business at 37 High Street Melrose Arch Johannesburg.
RBH
is ultimately controlled by the Royal Bafokeng Nation.
1.6.
"Mogs
”
means Mogs
(Proprietary) Limited a private company which has its principal
place of business at 37 High Street, Melrose Arch,
Johannesburg.
Mogs is as at the date of signature of this Consent Agreement
controlled by RBH.
1.7.
"Elbroc"
means
Elbroc Mining Products (Proprietary Limited a private company which
has its principal place of business at 37 High Street,
Melrose Arch,
Johannesburg
1.8. Stopetek" means Stope
Technology Services (Proprietary) Limited a private company which
has its principal place of business
at 37 High Street, Melrose Arch,
Johannesburg
1.9.
"Respondents"
means
RBH, Mogs, Elbroc and Stoptek collectively.
2. Background facts
2.1. MOGS began as a shelf
company registered on the 9 May 2007. On the 15 December 2007 MOGS
signed a sale of share agreement
under which it purchased the share
capital of Elbroc and Stopetek (the terms of this transaction had
been negotiated between
August and December 2007). The beneficial
and registered shareholding in Eibroc and Stopetek was transferred
on the 22 and 23
February 2008.
2.2. On 15 December 2007 the
shareholding in Mogs was held 35% to Royal Bafokeng Mogs (Pty)
Limited (an indirect subsidiary of
RBH) and 75% as to CV5 Limited.
2.3. Subsequent to the signing
of the saie of shares agreement the transaction in question was
tabled at a RBH strategy meeting
on the 18 January 2008 as RBH was
being asked to finance the acquisition at a level commensurate with
its MOGS shareholding,
at that stage 35%.
2.4. At the time of
implementation of the transaction Mogs was jointly controlled by
Royal Bafokeng Mogs (Pty) Limited (an indirect
subsidiary of RBH)
50.01% of the issues shares of Mogs and CVS Limited 40,99% of the
issued shares of Mogs.
2.5. The transaction was not
notified to the Commission as required by the provisions of section
13A of the Act. The Respondents
implemented the transaction on 22
and 23 February 2008.
2.6. MOGS requested KPMG to
undertake an investigation of MOGS' transactions to ensure
compliance with the Act.
2.7. Failure to notify the
Transaction only came to the attention of the Respondents when KPMG
advised MOGS on 14 November 2008
of the requirements for
notification of mergers under the provisions of the Chapter 3 of the
Competition Act.
2.8. After having considered
all the financial statements of the Respondents KPMG advised the
Respondents on 5 December 2008 of
the obligation that existed,to
notify the transaction.
2.9. On 10 December 2008 KPMG
advises the Commission of the transaction and the contravention of
Section 13A(3)
of the
Competition Act.
2.10. The
transaction was
notified to the Commission as a large merger on 20 March 2009 under
case no 2009Mar4358 and unconditionally approved
by the Competition
Tribunal on 27 May 2009.
3.
Commission's
investigation and findings
3.1. The Commission
investigated the alleged contravention and found the following:
3.1.1.The Transaction resulted
in the change of Elbroc and Stoptek control, which change of control
constituted a merger in terms
of section 12(1) of the Act.
3.1.2. Further, the Commission
found that the threshold for a large merger as defined in section 11
(5)(c) as read with section
11 (1) of the Act and Notice 253 of 2001
was met in respect of the Transaction.
3.1.3. Further, the Commission
found that the Respondents implemented the merger prior to the
notification of and approval by
the Tribunal in contravention of
section 13A(3) of the Act.
4.
Admissions
4.1. The Respondents admit that
the transaction constituted a notifiable large merger as defined in
Section 11(5)(c) of the Act.
4.2. The- Respondents further
admit that the merger was implemented prior to notification and
approval of the Competition Tribunal
in contravention of Section
13A(3) of the Act.
4.3. The Respondents further
admit that RBH, Mogs, Elbroc and Stoptek were responsible for
notifying the Commission of the Transaction.
5.
Compliance
with the Act
The Respondents agree and
undertake:
4.1. To refrain from engaging
in prior implementation of notifiable mergers in contravention of
section 13A(3) of the Act;
4.2. Develop and implement a
compliance programme designed to ensure that its employees,
management and directors do not engage
in any conduct which
constitutes a contravention of the Act, a copy of which programme
shall be submitted to the Commission within
60 days of the date of
confirmation of this consent agreement as an order of the Tribunal.
6.
Administrative penalty
6.1. The Respondents admit that
they are each liable to pay an administrative penalty in terms of
section 58(1 }(a)(iii) read
with section 59(1 )(d)(iv), 59(2) and
(3) of the Act.
6.2. RBH and Mogs collectively
agree to pay an administrative penalty of R1 000 000 (One Million
Rand), and Elbroc and Stopetek
collectively agree to pay an
administrative penalty of R100 000 (One Hundred Thousand Rand).
6.3. Each penalty shall be
payable within 7 (seven) days of the confirmation of this Consent
Agreement as an order of the Tribunal.
6.4. The administrative penalty
is payable into the bank account of the Commission whose, banking
details are:
Bank;
ABSA Bank
Name of
account:
Competition
Commission
Account
Number:
4050778576
Branch Code:
323345
6.5. Proof of payment of the
administrative penalty amounts will emailed to the Commission marked
for the attention of the Manager
of Mergers & Acquisitions.
6.6. The Commission wiii pay
over the penalty amount to the National Revenue Fund referred to in
section 59(4) of the Act.
7.
Full
and final settlement
7.1. This Consent Agreement,
upon confirmation thereof as a consent order by the Tribunal,
concludes all proceedings between the
Commission and the Respondents
in relation to the contravention of section 13A(3) of the Act,
investigated under the Commission's
case number: 2009Mar 4358.
Date and
signed at
MELROSE
on this
the
4
day of
APRIL
2011
ROYAL BAFOKENG HOLDINGS
(PTY) LIMITED
Date and
signed at
MELROSE
on
this the
4
day
of
APRIL
2011
MOGS
(PTY) LIMITED
Date and
signed at
ISANDO
on this
the
5
day of
APRIL
2011
ELBROC MINING PRODUCTS (PTY)
LTD
Date and
signed at
ISANDO
on this
the
5
day of
APRIL
2011
STOPE TECHNOLOGY (PTY) LTD
Date and
signed at
PRETORIA
on this
the
12
day of
May
2011
COMPETITION COMMISSION