IDC wants to see what commission advised Anglo
June 20, 2003
By Ann Crotty
Johannesburg - Lawyers acting on behalf of the Industrial Development Corporation (IDC) have made an application to get access to an advisory opinion given to Anglo American by the Competition Commission indicating that it could implement the acquisition of Stimela, which has a 10 percent stake in Kumba.
The application appears to be designed to delay the implementation of Anglo's proposed acquisition of Kumba, as a close study of the opinion might result in Anglo having to resubmit an application to the commission.
The IDC, which is intervening in the hearings before the Competition Tribunal, has indicated that it believed the tribunal did not have jurisdiction to decide on the matter being considered because it was not the same matter about which Anglo notified the commission.
Last June Anglo notified the commission that it intended to exercise a number of options it had over Kumba shares. At the time, Anglo held 9.6 percent of Kumba. Exercising these options would increase its stake to 34.9 percent.
Anglo told the commission that because it would secure "material influence" with a 34.9 percent stake, it felt it had to notify the commission.
In March this year, Anglo announced it had exercised the Stimela option, which increased its stake to just under 20 percent.
Shortly afterwards, Anglo told Business Report the decision to exercise that option was based on an advisory opinion that the commission had sent to Anglo in response to an approach from the mining group
. Such an opinion, which is not binding, is based on information Anglo provided to the commission.
Meanwhile, yesterday's proceedings at the tribunal involved discussion of the supply contract between Kumba and Iscor.
The IDC's expert witness argued that the contract was incomplete and open to interpretation and this could have negative competitive effects if Anglo was in control of the interpretation process.
Lawyers for Anglo referred to a number of safety clauses in the contract and argued that concerns about the incompleteness of the contract emerged only after IDC chief executive Khaya Ngqula became chairman of Iscor late last year.
Anglo challenged the allegation made by the IDC's expert witness that if Anglo controlled Kumba it might exert anti-competitive pressure on Iscor.
Anglo's advocate argued that Iscor not only had 70 percent of the South African steel market but was part of a powerful global group, namely LNM, and therefore had considerable power to retaliate against any action Anglo might take.
The hearing adjourned yesterday. It will resume in the first week of July to hear the parties summarise their cases.
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