Times Of Swaziland: LEITES, MA PROPS WIN ROUND ONE

LEITES, MA PROPS WIN ROUND ONE
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BY MBONGISENI NDZIMANDZE AND KWANELE DHLADHLA on 31/05/2019 02:55:00


MBABANE - Siyembili Motors Swaziland trading as Leites Toyota has won the first
round in its matter against Eswatini Competition Commission over the sale of
land.
This comes after Judge Nkosinathi Maseko issued an order directing that the
proceedings to the demand of a merger of Siyembili Motors Swaziland and MA Props
(PTY) Limited relating to Portions 1079 and 1080 of Farm No.2 be stayed.
This is until the finalisation of the legal proceedings pending at the High
Court under case No.220/2019.
The pieces of land which are now a subject of legal proceedings were purchased
from Siyembili Motors Swaziland by MA Props (PTY) Limited.
Siyembili Motors decided to seek legal recourse after the commission wrote them
a demand for notification of a merger and acquisition.
The commission was of the view that the parties should have notified it about
the transaction as it was one that was notifiable as per the law.
It (commission) claimed that MA Props acquired a controlling interest in an
asset which was or might be utilised for business purposes and therefore the
transaction fell under the ambit of a merger as defined in the Competition Act.
In the demand for notification, the commission’s then Chief Executive Officer
(CEO) Thabisile Langa stated that the commission had reasons to believe that
Siyembili and MA Props engaged in a transaction or conduct as described in
Section 35 of the Competition Act No.8 of 2007, involving the sale/transfer of
the properties, Portions 1079 and 1080 of Farm 2, both located in Mbabane.
In terms of Section 35 (1) of the Act, a person who, in the absence of authority
from the Commission whether as principal or agent and whether himself/herself or
his/her agent, participates in effecting- (a) “ a merger between two or more
independent enterprises engaged in manufacturing or distributing substantially
similar goods or providing substantially similar services, commits an offence
and shall, on conviction, be liable to a fine not exceeding E250 000 or to
imprisonment to a term not exceeding five years or both.
The CEO further alleged that in terms of Section 35(1) of the Competition
Commission Regulations, the commission may impose an administrative penalty of
up to 10 per cent of the enterprise’s annual turnover to ensure compliance
with the Act.
Call
“The Commission hereby calls upon Siyembili Motors (PTY) Limited to submit
within 30 days to the Commission all and/or any relevant documentation
concerning the transaction as envisaged by Section 35 of the Act,” reads part
of the demand for notification.
She pointed out that in terms of Section 35(1) of the Act, a merger or takeover
made in contravention of subsection 35(1) of the Act shall not have any legal
effect and no rights or obligations imposed on the participating parties, by any
agreement in respect of the merger or takeover, shall be legally enforceable
unless an application for condonation has been made to and granted by the
Commission.
Siyembili Motors now wants the High Court to set aside and declare as incorrect
the decision of the Commission to the effect that the sale of the vacant
portions of land from it and MA Props were a notifiable transaction.
Meanwhile, the issue of notification fee usually demanded by the commission in a
merger is a subject of litigation in the matter where the commission is
appealing the order of the High Court where it was ordered to refund MTN
Eswatini a sum of E600 000.
Through its attorneys from CJ Littler, the commission recently filed a notice of
appeal in the Supreme Court where it raised six grounds why it felt that the
High Court erred in its findings.