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The Competition Tribunal has approved the large merger whereby a new company, registered as K2019216440 (South Africa) Limited, will purchase the entire issued shares of Edgars Consolidated Stores Limited (ECSL).
 
The Edcon Group (ECSL, Edcon Limited and all their subsidiaries) is in financial distress and at risk of being forced into business rescue or insolvency proceedings. The merger is intended to achieve a restructuring and recapitalisation of the debt and equity structure of Edcon Limited. This, to provide a stable platform for the planned turnaround of the Edcon Group.
 
The transaction has been approved with conditions. These relate to ECSL and Edcon Limited’s commitment to fostering and developing a more competitive production environment in South Africa. This involves increasing local procurement, BEE participation (replacing the Edcon Staff Empowerment Trust to safeguard the rights and interests of beneficiaries) and ensuring that there are no job losses as a result of the merger.
 
Recently, Edcon’s shareholding in Celrose was acquired by the Industrial Development Corporation (IDC). This transaction also included the imposition of local procurement conditions.

Tribunal approves settlements involving power cable companies that colluded in City Power tender
 
The Tribunal has confirmed two separate consent agreements (settlements) involving power cable companies that tendered collusively in respect of a City Power tender.
 
Freefall Trading1071 CC (trading as Indlovu Enterprises) and Cables for Africa CC concluded separate settlements with the Commission. The companies share a common director and provide fault location and testing services on power cables.
 
Indlovu Enterprises and Cables for Africa have admitted that they discussed their bids and agreed on prices submitted for the City Power tender, to provide cable fault location services in the Johannesburg Metro.
 
They have agreed to pay administrative penalties of R10 724.15 (ten thousand seven hundred and twenty-four Rand and fifteen cents) and R10 079.50 (ten thousand and seventy-nine Rand and fifty cents) respectively.
 
The companies, claiming to have contravened the Competition Act in ignorance as they did not know their conduct amounted to a contravention of the Act, have also undertaken to implement and monitor competition law compliance programmes.
 
Meanwhile, the Commission said its investigation revealed that the companies had also tried to subvert the BEE Act while engaging in the collusive behaviour.
 
The Commission found that Indlovu had a better BEE level rating than Cables for Africa and that the companies had agreed that whenever Indlovu won a tender, it should subcontract the work to Cables for Africa which was not BEE compliant.
 
The Commission has confirmed to the Tribunal that it will also refer the matter to the Broad-Based Black Economic Empowerment Commission.
 
 

Issued by The Competition Tribunal