The Tribunal has dismissed an application brought by Zurivision (Pty) Ltd, Zokusize (Pty) Ltd, Paciflex Coal Mining (Pty) Ltd, Tantodex (Pty) Ltd, Invasion (Pty) Ltd and Asabisource (Pty) Ltd (“the Applicants”) to intervene in the Tribunal’s proceedings involving the proposed large merger between Thabong Coal (Pty) Ltd and South32 SA Coal Holdings (Pty) Ltd.
The Tribunal found that the Applicants had failed to show either that they have a material interest in the merger proceedings or that they will be able to assist the Tribunal in its consideration of the merger.
The Tribunal’s order and reasons will be published on its website at
www.comptrib.co.za in due course.
Applicants’ arguments
In their application to intervene in the merger proceedings, the Applicants argued that there were abnormalities and irregularities in the investigation of the proposed transaction undertaken by the Competition Commission (the Commission). The Applicants argued, among others, that the Commission’s report was fundamentally flawed.
The Applicants’ submissions were predicated on allegations of irregularity and illegality by the merger parties and the Department of Mineral Resources and Energy (“DMRE”) during the regulatory approval of the proposed transaction. The Applicants insinuated that the merger parties had misrepresented the true nature of the acquisition being made.
The Applicants further argued that there is pending mining rights litigation in the High Court between them and the merger parties and that they therefore had a direct interest in the merger proceedings. The Applicants held that the Tribunal’s decision itself would be affected by the outcome of the litigation between the parties.
Merger parties submissions
The merger parties argued that the Applicants had no valid basis for intervention in the proceedings and that their arguments did not constitute sufficient grounds for intervention.
They submitted, among others, that competition law approval of the proposed transaction would not have any effect on the High Court disputes – and that the disputes were neither merger-specific, nor did they fall within the jurisdiction of the competition authorities under the Competition Act. The disputes were therefore irrelevant to the merger approval process under the Competition Act.
The merger parties further argued that the Applicants’ application was an abuse of the processes because their sole purpose was not to ventilate legitimate concerns regarding competition or public interest effects of the proposed transaction, but simply to attempt to secure an advantage for themselves in relation to their ongoing High Court disputes.
Tribunal findings
The Tribunal may permit a third party to intervene in merger proceedings only if it has shown a material and substantial interest in the matter, or if it has shown that it can provide evidence of its ability to assist the Tribunal in the merger proceedings. In this matter, the Tribunal has found that the applicants have not made out a proper case for intervention:
“This is because the Applicants did not demonstrate that that they have a material or any other interest in the merger proceedings involving Thabong Coal and South32. At best, the Applicants demonstrated a purely commercial interest, which, in the context of the merger, is not a sufficient ground for being granted the right to intervene. The Applicants have also failed to establish a nexus between the mining rights issues and appeals they have raised and the consideration of this merger”.
