The Competition Commission has questioned Massmart’s compliance with one of the conditions imposed on its merger with US-based Wal-Mart. The Commission has issued a Notice of Apparent Breach for Massmart’s alleged failure to reinstate 503 workers that were retrenched shortly before the merger. The Commission alleges that only 244 of the retrenched employees have been reinstated although this number is disputed by Massmart.
The Commission has indicated that if Massmart does not comply with its Notice of Apparent Breach by either submitting a plan to remedy the breach or asking the Competition Tribunal to review the Notice of Apparent Breach on the grounds that it has substantially complied with its obligations with respect to the conditional approval of the merger, it will refer the matter to the Tribunal. The Tribunal will then have to determine whether the condition was fulfilled. However, if it finds against Massmart, the Tribunal has the power to revoke its approval of the merger.