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Nedbank, Erf 7 admit to prior implementation of a merger –
agree to R2 million penalty and commitments on future conduct
The Tribunal has confirmed, as an order, a consent agreement wherein Nedbank Limited (“Nedbank”) and Erf 7 Sandown (Pty) Ltd (“Erf 7”) admit that they contravened section 13A(3) of the Competition Act (“the Act”) by implementing a transaction prior to obtaining the approval of the competition authorities. The consent agreement was concluded between the Competition Commission (“the Commission”), Nedbank and Erf 7.
Nedbank and Erf 7 accept that they are jointly and severally liable to pay an administrative penalty, the one paying, the other to be absolved. Nedbank will pay the administrative penalty totalling R2 million.
In addition, Nedbank and Erf 7 undertake to:
- notify the Commission of any future transactions that constitute a notifiable merger;
- refrain from engaging in prior implementation of notifiable mergers in contravention of the Act;
- update their corporate governance by enhancing Nedbank’s competition law compliance programmes to ensure that its employees, management and executive directors do not engage in future contraventions of the Act; and
- submit a copy of their competition law compliance programme to the Commission.
Background
In summary, the Commission’s investigation found that Nedbank, through Nedbank Property Partners, a Division of Nedbank Corporate and Investment Banking (“NPP”), acquired the remaining shares in Erf 7 when exercising its security rights in a risk mitigation transaction.
After Nedbank exercised its security interest it acquired sole control of Erf 7 effectively from 24 August 2017. The Commission found that this transaction constituted a merger and was notifiable in terms of section 13A of the Act; and that Nedbank and Erf 7 implemented this transaction without prior approval and therefore contravened section 13A(3) of the Act .
On 5 August 2021, Nedbank and Erf 7 filed the transaction with the Commission. In the merger filing, they acknowledged that the transaction was a notifiable large merger and that their conduct of implementing the merger without the required prior approval was an unintentional contravention of the Act.
Following the voluntary disclosure made by Nedbank and Erf 7, the Commission assessed the large merger and recommended to the Tribunal that the transaction be unconditionally approved. The Tribunal approved the large merger without conditions.
The consent agreement will be available on the Tribunal’s website at www.comptrib.co.za.
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