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Johannesburg - The Competition Tribunal on Wednesday confirmed its highest penalty to date for firms which failed to notify the competition authorities of a merger before implementing it.
The penalty of R1.1m was included in a settlement reached by the competition commission, JSE-listed construction group Wilson Bayly Holmes - Ovcon [JSE:WBO] and Edwin Construction.
In the settlement, WBHO and Edwin admitted that they had failed to notify the commission of a merger they entered into in 2005.
The companies also agreed to pay the R1.1m penalty for the contravention, and to continue to implement their competition compliance programme.
“This is the highest penalty yet levied on firms that failed to notify it of a merger. The last penalty for this type of conduct was levied on Netcare and Community Hospital Group in 2008 and amounted to R500 000,” said Maarten van Hoven, the manager of mergers and acquisitions.
The commission said that this time around it had taken a tougher approach to such failures, because the Competition Act had been in existence for 11 years and by now “firms should know better.”
According to Van Hoven, the commission's approach differed here in that it levied a penalty on each of the merging parties - R1m for WBHO and R100 000 for Edwin.
Van Hoven said that the merging parties brought this matter to the commission's attention when they became aware of it, and cooperated with the commission in its assessment of the transaction.
