Firms agree to pay R2 million penalty for prior implementation of a merger

Firms agree to pay R2 million penalty
for prior implementation of a merger

The Tribunal has confirmed, as an order, a consent agreement wherein QCP1 Investments (Pty) Ltd (“QCP1”) and Cape Trans Property Investments (Pty) Ltd (“Cape Trans”) admit that they contravened section 13A(3) of the Competition Act (“the Act”) by implementing a notifiable merger without the prior approval of the Competition Commission (“the Commission”).

QCP1 and Cape Trans accept that they are jointly and severally liable for the payment of an administrative penalty (the one paying, the other to be absolved). They have agreed that QCP1 will pay the penalty in the amount of R2 000 000.

In addition, the firms 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;
develop, implement and monitor a competition law compliance program incorporating corporate governance, designed 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.

The Tribunal’s order can be viewed at, or downloaded from, https://www.comptrib.co.za/case-detail/20110.

Background

In February 2022, the Commission received notice of a prior implemented intermediate merger wherein QCP1 acquired full control of a rental enterprise known as 47 Somerset Road, Cape Town, Western Cape, from Cape Trans in 2017.

QCP1 and Cape Trans voluntarily approached the Commission and filed the transaction in February 2022, acknowledging that the transaction was a notifiable intermediate merger which they had implemented without the required prior approval, thus contravening section 13A of the Act.