PROBE INTO DUPS, PSPF’S E74M FARM DEAL

MBABANE – An investigation has been instituted into the sale of Thonkwane Estates by Dups Holdings to the Public Service Pension Fund (PSPF) for a fee of around E74 million.

The two institutions have failed to comply with the Competition Act in that they did not report the transaction to the Swaziland Competition Commission (SCC).
Dups is reported to have made a profit of around E46 million when it sold the property to the PSPF after having bought it two months earlier for E28 million from the executor of the estate.
Thabisile Langa, the SCC Chief Executive Officer, informed the Times SUNDAY that the commission was currently engaged in a process of discussing the transaction with Dups and PSPF. 
“We have engaged the parties and advised them to notify the transaction. 

The engagement with the parties is still ongoing and the matter has not been finalised yet,” Langa said.
The CEO stated that all parties involved were expected to comply with the law before implementation of a merger or acquisition transaction.
She said the law also allowed the parties to make an application for condonation with the commission following prior implementation of an acquisition without notification.
“If, however, the parties after prior implementation do not notify and are insistent on not notifying even after engagement by the commission, the commission will investigate the matter and take the matter to the Board of Commissioners for enforcement of the law.

In terms of Section 35 of the Act, failure to notify a merger or acquisition is an offence which attracts a fine not exceeding E250 000 or to imprisonment to a term not exceeding five years or both.
Further, Regulation 28A of the Competition Commission (Amendment) Regulations Notice of 2016 empowers the commission to impose a fine of up to 10 per cent of a firm’s turnover for failure to comply with the Act,” Langa said.
Asked about the extent to which institutions do not report such transactions, the CEO said it would be difficult to quantify the non-compliance “but we have to acknowledge that there is definitely an aspect of non-compliance and the Commission takes action on parties if they are found to have not complied with the Competition Act”.
In determining the administrative penalty to impose on those who do not comply with the Act, Langa said they considered factors such as co-operation of the parties; the parties’ knowledge and experience with merger notifications in various jurisdictions; legal advice obtained from a reputable law firm with extensive Swazi competition law experience; the parties’ conduct in relation to other jurisdictions in respect of the same transaction; and the need to deter would-be offenders of the Act.

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