| Wed 24 Nov 2010, 15:01 | | THEE -The Competion Commision - Outcome of competition tribunal hearings on 24 |
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THEE
THEE -The Competion Commision - Outcome of competition tribunal hearings on 24
November
Outcome of competition tribunal hearings on 24 November
(Following is a guideline for journalists. The information can be used but
please do not quote Nandi Mokoena or the Tribunal)
1 Settlement between Commission and Pioneer
Earlier today the Tribunal heard submissions from the Competition Commission and
third parties namely Imraahn-Ismail Mukaddam, the Black Sash and HM Neethling,
who competes in the bakery industry. National Treasury however did not make a
submission as it is currently in discussions with the Commission on the remedies
provided for in the settlement. The Tribunal adjourned the hearing and will
consider submissions on the remedies next Tuesday, 30 November, at 10h00.
Background
This morning`s hearing concerned the settlement reached by the Competition
Commission and Pioneer Foods on 2 November 2010. The agreement purports to
settle eight separate investigations the Commission had undertaken involving
alleged contraventions of the Competition Act. Although other firms are alleged
to have been involved in some of the activities, the present settlement is only
with Pioneer. In respect of some of these investigations Pioneer was granted
conditional leniency. The investigations involved the maize and wheat milling
industries, baking, poultry and eggs. Conduct ranges from collusion, unlawful
information sharing and predatory pricing.
As part of the settlement Pioneer agreed, amongst other things, to pay R250
million to the National Revenue Fund as an administrative penalty; pay R250
million to create an Agro-processing Competitiveness Fund which aims to promote
competitiveness, employment and growth in food value chains and to adjust its
pricing of flour and bread such as to reduce its gross margin. The total
settlement will be payable over a two year period.
Settlement agreements require the approval of the Tribunal to be enforceable.
In February 2010 the Tribunal imposed a fine of R195,7 million on Pioneer in
respect of cartel activities in the bread industry. The present settlement
agreement excludes this amount.
2 Settlement in the plastic pipes cartel
The Tribunal confirmed this settlement in its hearing earlier today.
Background
Swan Plastics manufactures plastic pipes used in the plumbing, civil and
agricultural sectors and was accused by the Commission, along with seven others,
of price fixing, tender rigging and dividing markets by allocating contracts and
customers. At the time DPI Plastics, also a plastic pipe manufacturer, assisted
the Commission to conclude its investigation by providing evidence of the
collusion in exchange for immunity from prosecution. Since the Commission
referred its case to the Tribunal, in February 2009, the Tribunal has confirmed
two settlement agreements - with Marley Pipe Systems and Flo-Tek pipes. In these
settlements, both Marley and Flo-Tek admitted they had contravened the
Competition Act and agreed to pay penalties of around R31 million and R5 million
respectively, being 6% of their turnovers for 2007.
In the settlement agreement, Swan Plastics admits that it contravened the
Competition Act. It also agrees to pay a R7 million penalty, being 6% of its
turnover for 2007. In addition to this, Swan Plastics undertakes to cooperate
with the Commission`s prosecution of any other respondents in the case and to
implement compliance programmes designed to ensure that its employees do not
engage in such contraventions in future.
The Tribunal is presently hearing a matter, which is part heard, against five
other respondents which the Commission alleges were part of the same cartel.
Some of these firms are contesting whether they were part of the alleged cartel,
whilst others are contesting the extent of their involvement. That case will
continue in January 2011.
3 Proposed large merger between Standard Bank Group (SBG) and Credit Suisse
Standard Bank Securities (CSSS)
This morning the Tribunal approved this merger without conditions.
Background
In this transaction Credit Suisse will exit as a shareholder of CSSS and SBG
will acquire 50% of the issued ordinary share capital of CSSS from Credit
Suisse. CSSS is an institutional stock brokerage business and SBG is a financial
services group.
The Competition Commission assessed the proposed merger and recommended that the
Tribunal approve it without conditions.
Issued By:
Nandi Mokoena
PR Consultant: Competition Tribunal
Cell: +27 (0) 82 399 1328
E-mail: NandisileM@live.co.za
On Behalf Of:
Lerato Motaung
Registrar: Competition Tribunal
Tel: (012) 394 3355
Cell: +27 (0) 82 556 3221
E-Mail: LeratoM@comptrib.co.za
Date: 24/11/2010 15:01:40 Produced by the JSE SENS Department.
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