SAFLII Note: Certain personal/private details of parties or witnesses have been redacted from this document in
compliance with the law and SAFLII Policy
COMPETITION TRIBUNAL REPUBLIC OF SOUTH AFRICA
Case No: CO080Aug20
In the matter between:
The Competition Commission Applicant
And
Kalundu Trading (Pty) Ltd Respondent
Panel : Y Carrim (Presiding Member), F Tregenna (Tribunal Member), A Ndoni
(Tribunal Member)
Heard on: 14 August 2020
Decided on: 14 August 2020
CONSENT AGREEMENT
The Tribunal hereby confirms the consent agreement between the Competition
Commission and Kalundu Trading (Pty) Ltd annexed hereto.
CONSENT AGREEMENT IN TERMS OF SECTION 490 AS READ WITH
SECTIONS 58(1)(a)(iii) and 58(1) (b) OF THE COMPETITION ACT, 89 OF 1998,
AS AMENDED, BETWEEN THE COMPETITION COMMISSION AND KALUNDU
TRADING (PTY) LTD, IN RESPECT OF CONTRAVENTIONS OF SECTION 4(1)(b)
(ii) OF THE COMPETITION ACT, 1998.
Preamble
The Competition Commission and Kalundu Trading (Pty) Ltd ("Kalundu") hereby
agree that application be made to the Competition Tribunal for the confirmation of
this Consent Agreement as an order of the Tribunal in terms of section 490 read with
section 58(1)(a)(iii) and 58(1)(b) of the Competition Act, No. 89 of 1998, as
amended, in respect of contraventions of section 4(1)(b) (ii) of the Act, 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, No. 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 Mulayo Building (Block C), the DTI Campus, 77 Meintjies Street,
Sunnyside, Pretoria, Gauteng;
1.3 "Commissioner" means the Commissioner of the Commission, appointed in
terms of section 22 of the Act;
1.4 "Complaint" means the complaint initiated by the Commissioner in terms of
section 498(1) of the Act under case number 2019Mar0067;
1.5 "Consent Agreement" means this agreement duly signed and concluded
between the Commission and Kalundu;
1.6 "Kalundu" means Kalundu Trading (Pty) Ltd, a private company duly registered
and incorporated in accordance with the laws of the Republic of South Africa,
with its principal place of business situated at 182 Allan Road, Glen Austin
Agricultural Holdings, Midrand, Gauteng.
1.7 "POS" means POS Services Holland (South Africa) (Pty) Ltd ("POS"), a
company duly registered and incorporated in accordance with the laws of the
Republic of South Africa, with its principal place of business situated at Unit no.
7, Mica Drive, Newport Business Park, Kya Sand Ext 101, Johannesburg,
Gauteng;
1.8 "Parties" means the Commission and Kalundu;
1.8 "Respondents" means Kalundu and POS;
1.10 "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
Mulayo building (Block C), the DTI Campus, 77 Meintjies Street, Sunnyside, Pretoria,
Gauteng.
2. COMMISSION'S INVESTIGATION AND FINDINGS
2.1 On 11 March 2019, the Commissioner initiated a complaint in terms of section
498(1) of the Act against the Respondents. The allegations against the Respondents
are that they entered into an agreement and/or engaged in a concerted practice to
divide markets by allocating customers in the market for the supply of starter motors
and alternators. The case was investigated under case number: 2019Mar0067.
2.2 The Commission's investigation against Kalundu and POS revealed the
following:
2.2.1 Prior to POS entering the South African market towards the end of 2006,
Kalundu supplied starter motors and alternators to wholesalers, which it sourced
directly from Original Equipment Manufacturers such as Bosch, Lucas and others.
2.2.2 Subsequent to POS entering the South African market, towards the end of
2006, POS and Kalundu entered into an agreement in terms of which Kalundu will
purchase starter motors and alternators exclusively from POS to on-sell to
wholesalers on condition that POS will not approach Kalundu's existing and future
customers of starter motors and alternators in the country.
2.2.3 This agreement was negotiated and concluded by Mr Harald van
Haarster, the owner of POS and Mr Patrick Scharer the owner of Kalundu towards
the end of 2006.
2.2.4 In order to monitor compliance with the agreement, Mr Scharer of Kalundu
would send a list containing the names of Kalundu customers to POS and POS
would ensure that it does not approach these customers. POS was at liberty to
sell to any other customer that was not on Kalundu's customer list.
2.2.5 Kalundu's list of customers which POS was precluded from approaching
initially contained about eight (8) companies in 2007. This list was updated from
time to time as and when Kalundu obtained new customers. By August 2018, the
list contained about two hundred (200) customers, which included Midas.
2.2.6 In and around August 2018, POS approached Midas to market and sell its
starter motors and alternators. When Kalundu became aware of POS' action, it
instructed its lawyers to issue a letter to POS demanding it to desist from
poaching its customers in compliance with the agreement.
2.2.7 The conduct outlined above between POS and Kalundu constitutes
division of markets by allocating customers in contravention of sections 4(1)(b)(ii)
of the Act.
3. ADMISSION
Kalundu admits that it engaged in prohibited practices in contravention of section
4(1)(b)(ii) of the Act in relation to the conduct described in paragraph 2 above.
4. FUTURE CONDUCT
Kalundu agrees to:
4.1 prepare and circulate a statement summarizing the contents of this Consent
Agreement to its employees, managers and directors within fourteen (14) days of the
date of confirmation of this Consent Agreement as an order of the Tribunal;
4.2 refrain from engaging in conduct in contravention of section 4(1)(b) of the Act in
future;
4.3 develop, implement and monitor a competition law compliance programme as
part of its corporate governance policy, which is designed to ensure that its
employees, management, directors and agents do not engage in future
contraventions of the Act. In particular, such compliance programme should include
mechanisms for the identification, prevention, detection and monitoring of any
contravention of the Act;
4.4 submit a copy of such compliance programme to the Commission within sixty
(60) days of the date of confirmation of this Consent Agreement as an order by the
Tribunal; and
4.5 undertakes henceforth to engage in competitive practices.
5. ADMINISTRATIVE PENALTY
5.1 Kalundu agrees and undertakes to pay an administrative penalty in the amount
of R458 979, 52 (four hundred and fifty-eight thousand and nine hundred and
seventy-nine rands and fifty-two cents). This amount does not exceed 10% of
Kalundu's turnover in the Republic of South Africa for the financial year ending
February 2019.
5.2 The payment shall be made in 36 monthly instalments of R12 749,43 (twelve
thousand, seven hundred and forty-nine rands and forty-three cents). The first
instalment shall be made after six months of the confirmation of the Consent
Agreement as an order of the Tribunal.
5.3 No interest will be levied upon the administrative penalty for the first twelve
instalments. Thereafter, interest will be levied on the remaining outstanding balance
at the prevailing interest rate, on debts owing to the State as prescribed by the
Minister of Finance in terms of section 80(1)(b) of the Public Finance Management
Act 1 of 1999, as amended. At the time of the signature of this Consent Agreement,
the applicable interest rate is 10.25%.
5.4 The administrative penalty must be paid into the Commission's bank account
which is as follows:
Name: The Competition Commission Bank: Absa Bank, Pretoria
Account Number: [....]
Branch Code: 632005
Ref: 2019Mar0067/ Kalundu
5.5 The administrative penalty will be paid over by the Commission to the National
Revenue Fund in accordance with the provisions of section 59(4) of the Act.
6. COMPLIANCE
All compliance reports and proof of payments relating to this matter shall be
forwarded to the Commission at CartelSettlements@compcom.co.za .
7. FULL AND FINAL SETTLEMENT
This agreement, upon confirmation as an order of the Tribunal, is entered into in full
and final settlement in respect of the Commission's investigation into the activities of
Kalundu under case no. 2019Mar0067 and concludes all proceedings between the
Commission and Kalundu.
Tembinkosi Bonakele