COMPETITION TRIBUNAL
REPUBLIC OF SOUTH AFRICA

							Case No:69/AM/Oct10

In the matter between:

The Competition Commission						Applicant

and

Panel               : N Manoim (Presiding Member), A Wessels (Tribunal Member) and Y Carrim (Tribunal Member)

Heard on            10 November 2010

Decided on  :       10 November 2010

Order

The Tribunal hereby confirms the order as agreed to and proposed by the Competition Commission and the respondents, annexed hereto marked "A".

Presiding Member
N Manoim

IN THE COMPETITION TRIBUNAL OF SOUTH AFRICA

In the matter between:

THE COMPETITION COMMISSION							APPLICANT

And

The Competition Commission and WBHO Construction (Proprietary) Limited and Edwin Construction (Proprietary) Limited 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)(t) 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:

2. Background facts

2.1.    The First Transaction

2.1.2. The First Transaction was not notified to the Commission as required by the provisions of section 13A of the Act. The Respondents implemented the First Transaction immediately after the conclusion of the shareholders agreement.

2.2.   The Second Transaction

2.2.3.	The First and Second Transaction shall hereinafter be collectively referred to as the "Transaction".

2.2.4	Failure to notify the Transaction only came to the attention of the Respondents when the auditors BDO Spencer Steward Inc ("BDO") were auditing WBHO's financial statements for the financial year ending 30 June 2009. BDO raised the question as to whether the acquisition of control by WBHO over Edwin had been notified to the Commission.

2.2.5.	WBHO advised the Commission that immediately upon receiving the query from BDO it contacted its legal advisors, Cliffe Dekker Hofmeyr Inc ("CDH"), to check whether the Transaction required compulsory notification to the Commission. CDH confirmed that the Transaction required notification and was instructed by WBHO to bring this fact to the attention of the Commission and to resolve the issue as soon as possible.

2.2.6.	The Commission met with CDH and a representative of WBHO on 28 July 2009, and advised the parties to notify the Transaction as soon as possible and to provide factual background to the failure to notify.

2.2.7.	The Transaction was notified to the Commission on 18 August 2009 as an intermediate merger, which was approved by the Commission 29 September 2009, under case number: 2009Aug4617.

3.1.1.	The Transaction resulted in the change of Edwin's 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 an intermediate merger as defined in section 11 (5)(b) 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 merging parties implemented the merger prior to the notification of and approval by the Commission in contravention of section 13A(3) of the Act.

4.1.	The Respondents admit that the Transaction constituted a notifiable intermediate merger as defined in Section 11(5)(b) of the Act
4.2.	The Respondents further admit that the merger was implemented prior to notification and approval of the Commission in contravention of Section 13A(3) of the Act.
4.3.	The Respondents further admit that both WBHO and Edwin were responsible for notifying the Commission of the Transaction.

The Respondents agree and undertake to:

5.1. refrain from engaging in prior implementation of notifiable mergers in contravention of section 13A(3) of the Act; and

6. Administrative penalty
61.	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
62.	WBHO agrees to pay an administrative penalty of R1 000 000 (One Million Rand), and Edwin agrees to pay an administrative penalty of R100 000 (One Hundred Thousand Rand).
Each penalty shall be payable within 7 (seven) days of the confirmation of this Consent Agreement as an order of the Tribunal.
The administrative penalty is payable into the bank account of the Commission whose, banking details are:

7. Full and final settlement

This Consent Agreement, upon confirmation thereof as a consent order by the Tribunal, concludes al! 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: 2009Aug4617.

WHBO Construction (Prorietary) Limited 

Edwin Construction (Prorietary) Limited

Competition Commission