The Competition Commission says it will investigate a complaint of legal non-compliance in a deal in which electrical infrastructure firm Actom acquired transformer producer SGB-Smit Power Matla (SSPM). Competition Commission spokesperson Siyabulela Makunga confirmed to theMail & Guardianthat the fair trade watchdog was investigating a complaint from local company Afro-Map — which failed in its own bid to buy SSPM. Its managing director Martin Ntuli alleged that provisions of the Competition Act were flouted.
Afro-Map has alsofiled papersat the South Gauteng High Court against the deal, claiming bias by SSPM’s business rescue practitioners (BRPs) and bad-faith conduct by theIndustrial Development Corporation, which participated as a senior secured creditor. In his submission to the Competition Commission, Ntuli said the deal contravened the Competition Act through the exchange of proprietary and manufacturing information with SSPM before the conclusion as well as the removal of machinery and equipment from SSPM premises. “Doing this prior to obtaining the required notifications or approvals to implement the merger or transaction, is a practice prohibited in terms of the Competition Act,” said Ntuli.
“The prohibited conduct by the acquiring entity Actom and that of the BRPs on behalf of target SGB-Smit Power Matla (Pty) Ltd, exhibits a complete disregard and arrogant disrespect of the competition Act. This prohibited conduct further supports our submission to the commission as an interested and affected party opposing this merger. “This is on the grounds of competition, public interest, flawed collusive, corrupt BRP process and conduct, which led to the lodging of this merger for approval by the commission.” In the court case, papers seen by the M&G showed that Afro-Map accused Ian Fleming and Warren Castle, who were appointed business rescuers for SSPM in September 2023, of having applied “flawed reasoning” in recommending the acquisition and acted in a manner that was “irrational, unreasonable and procedurally unfair”.
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An affidavit by Ntuli cited Fleming, Castle, Actom, SSPM, the IDC and state power utility Eskom as respondents. “The conduct of the BRPs, IDC and Eskom, perpetuates the disadvantages experienced by the majority of black South Africans in participating meaningfully in the national economy,” Ntuli said in the affidavit. “This undermines the constitution, achievement of equality and transformation of sectors dominated by a few players, who are largely white.”
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