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[2013] ZACT 15
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Competition Commission v Pangbourne Properties Limited and Others (16246) [2013] ZACT 15; [2013] 1 CPLR 103 (CT) (13 March 2013)
COMPETITION
TRIBUNAL
REPUBLIC
OF SOUTH AFRICA
Case
No: 016246
In
the matter between:
THE
COMPETITION COMMISSION OF SOUTH AFRICA
.........................................
APPLICANT
and
PANGBOURNE
PROPERTIES LIMITED
...............................................................
1
st
respondent
MORULAT
PROPERTIES INVESTMENTS 2 (PTY) LTD
.....................................
2
nd
respondent
PROUD
HERITAGE PROPERTIES 283 (PTY) LTD
..........................................
3
rd
respondent
Panel:
A Wessels (Presiding Member)
M
Mazwai (Tribunal Member)
M
Mokuena (Tribunal Member)
Heard
on: 13 March 2013
Decided
on: 13 March 2013
The
Tribunal hereby confirms the consent agreement as agreed to between
the Competition Commission and the Respondents, dated
12 February
2013 and annexed hereto as “
Annexure
A”.
Presiding
Member
Concurring:
M Mazwai and M Mokuena
IN
THE COMPETITION TRIBUNAL OF SOUTH AFRICA
CC
CASE NOS.: 2012FEB0050 AND 2012FEB0051
CT
CASE NO; 014456
In
the matter between:
THE
COMPETITION COMMISSION
.................................................................................
Applicant
and
PANGBOURNE
PROPERTIES LIMITED
...............................................................
1st
Respondent
MORULAT
PROPERTIES INVESTMENTS 2 (PTY) LTD
...................................
.
2nd
Respondent
PROUD
HERITAGE PROPERTIES 283 (PTY) LTD
............................................
.
3rd
Respondent
CONSENT
AGREEMENT IN REGARD TO AN ALLEGED CONTRAVENTION OF SECTION 13A OF
THE COMPETITION ACT 89 OF 1998 (AS AMENDED)
The
Competition Commission and Pangbourne Properties Limited, Morulat
Properties Investments 2 (Pty) Ltd and Proud Heritage Properties
283
(Pty) Ltd hereby agree that an application be made to the
Competition Tribunal for confirmation of this Consent Agreement
as
an order of the Competition Tribunal in terms of Section 49D read
with Section 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 &
Esselen Streets, Pretoria, Gauteng;
1.3.
Consent Agreement
- means this
written consent agreement duly signed by the Commission, Pangbourne,
Morulat and Proud Heritage;
1.4.
Morulat
- means Morulat Property Investments 2 (Pty) Ltd, a private company
incorporated in South Africa, which has its principal place
of
business at 21 Porter Avenue, Melrose North, Johannesburg. Morulat
is a wholly-owned subsidiary of an investment trust called
MWS
Investment Trust ("MWS Trust");
1.5.
Pangbourne-
means Pangbourne
Properties Limited, a public company incorporated in South Africa,
which has its principal place of business
at 3rd Floor, Rivonia
Village, Rivonia Boulevard, Rivonia. Pangbourne is a wholly owned
subsidiary of Capital Property Fund,
which is a property unit trust
fund;
1.6.
Proud Heritage
- means
Proud Heritage Properties 283 (Pty) Ltd, a private company
incorporated in South Africa which has its principal place of
business
is 21 Porter Avenue, Melrose North, Johannesburg. Proud
Heritage is a wholly-owned subsidiary of MWS Trust;
1.7.
Respondents
-
mean Pangbourne, Morulat and Proud Heritage;
1.8.
Tribunal-
means the Competition
Tribunal of South Africa, a statutory
body
established in terms of Section 26 of the Act with its principal
place of business at Building C, Mulayo Building, dti Campus,
Cnr
Meintjies & Esselen Streets, Pretoria, Gauteng.
2.
Background facts
2.1.
The Pangbourne and Moruiat Transactions
2.1.1.
During 2008, Pangbourne's Board of Directors offered for sale to the
market a list of seventy six (76) property letting
enterprises from
Pangbourne's overall property portfolio - each with separate leases
and service, maintenance and supply contracts.
2.1.2.
The trustees of the MWS Trust, acting through two wholly owned
subsidiaries, namely Morulat and Proud Heritage, agreed
to purchase
seventy one (71) of the seventy six (76) Benrose property
enterprises in two separate sale agreements. The first
sale
agreement reiated to the sale of forty-six (46) property letting
enterprises to Morulat (the “Morulat transaction"),
and
the second sale agreement related to the sale of twenty-five (25)
property letting enterprises to Proud Heritage (the “Proud
Heritage transaction”).
2.1.3.
At the time of the Moruiat and Proud Heritage transactions, the two
transactions were not notified to the Commission and
the parties
implemented the transactions on the understanding they constituted
small mergers.
2.1.4.
The Commission contended that both transactions should have been
considered as one intermediate merger for purposes of the Act
and
that the turnover and asset values of the
property letting enterprises that were sold in terms thereof should
be aggregated for
purposes of calculating whether or not the merger
met the thresholds for notification at the time.
2.1.5.
An interlocutory application was launched by the Respondents seeking
an order from the Tribunal to set aside the Commission's
opinion
that the transactions should be notified as a single intermediate
merger but was postponed
sine die
by the Tribunal on 8 August 2012.
2.1.6.
By agreement between the Respondents and the Commission, the
Respondents filed the two transactions as a single intermediate
merger with the Commission.
2.2.
Following investigation, the Commission found that the transaction
did not raise any competition concerns as it did not result
in any
substantial prevention or lessening of competition in any market,
and did not give rise to any public interest concerns.
Consequently,
on 11 December 2012 the Commission approved the transaction without
conditions.
3.
Commission's investigation and findings
After
concluding its investigation into and approving the merger, the
Commission concluded that the two transactions should have
been
notified as a single intermediate merger and that the implementation
of the transactions constituted a breach of section
13A(3) of the
Act.
4.
Future conduct
The
Respondents agree and undertake:
4.1.
Not to engage in prior implementation of a notifiable merger in
contravention of section 13A(3) of the Act; and
4.2.
To implement a compliance program within twelve (12) months from
date of which this Consent Agreement is confirmed as an
order of the
Tribunal. The compliance program will be designed to ensure that the
Respondents’ employees and directors
are informed of and
comply with their obligations under the provisions of the Act.
5.
Administrative penalty
5.1.
The Respondents agree that they are jointly and severally 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.
5.2.
The Respondents agree that they are jointly and severally liable to
pay an administrative penalty of R75 000 (Seventy Five
Thousand
Rand), one
party paving, in full the
others to be absolved
.
5.3.
The penalty shall be paid within seven days (7) of the confirmation
of this Consent Agreement as an order of the Tribunal.
5.4.
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
5.5.
Proof of payment of the administrative penalty amounts will emailed
to the Commission marked for the attention of the Manager
of Mergers
& Acquisitions.
5.6.
The Commission will pay over the penalty amount to the National
Revenue Fund referred to in section 59(4) of the Act,
Full
and final settlement
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 all matters investigated under the
Commission's case numbers: 2012Feb0050 and 2012Feb0051
in relation
to the alleged contravention of section 13A(3) of the Act.
7.
Effect of this Agreement
The
Respondents record that nothing in this Agreement amounts to, or
should be taken to imply an admission of liability or wrongdoing
on
the part of any of them.
Signed
at
Rivonia
on
7 February
2013
Pangbourne
Properties Limited
Authorised
and Warranting that authority
Signed
at
Rivonia
on
7 February
2013
Morulat
Properties Investments 2 (Pty) Ltd
Authorised
and Warranting that authority
Signed
at
Rivonia
on
7 February
2013
Proud
Heritage Properties (Pty) Ltd
Authorised
and Warranting that authority
Signed
at
Pretoria
on 12
February
2013
Shan Ramburuth
Competition Commissioner