WHAT MAKES LEITES, MA SALE NOT NOTIFIABLE

MBABANE – Siyembili Motors and MA Props are in two totally separate markets and do not fall under the ambit of Section 35 of the Competition Act.

Wynand Louw, who is the Director of Siyembili Motors, pointed out that Siyembili was a motor vehicle franchise dealer engaged in the motor industry while MA Props was a Property Management Consultant and Development Company.
“Furthermore, the definition of a merger in Section 2 of the Act demonstrates quite clearly that, it is the acquisition of an asset which is or may be utilised for or in connection with production or distribution of any commodity,” submitted Louw.

Notification

This submission was made in the matter where Siyembili Motors Swaziland, trading as Leites Toyota, which has taken the Swaziland Competition Commission to court over the sale of land. 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 veracity of all allegations made in the application are yet to be tested in court.

Louw asserted that he had been advised and verily believed that the word ‘commodity’  in legal parlance, related to goods which could be physically traded in the market such as metals, grain, oil, meet and arrange of other goods.
The director averred that commodities were those products which were usually bought and sold on exchanges, and which were priced by supply and demand dynamics.
He said the commission’s contention that simply because MA Props acquired a control interest in an asset, being a vacant piece of land, was with respect absurd.

Detrimental

Louw contended that if this contention was to be the law, it would lead to absurd results.
“In that respect, the parties would then be obliged to put a stamp on the transaction, transfer duty and in addition thereto, a merger notification fee to the commission,” he argued.
He submitted that this would have adverse effects on the economy of Eswatini and would be detrimental to investment.

“In such circumstance, given the fact the merger notification fee is based on the value of the asset or the turnover of the merging parties (whichever is greater), it is feasible as an example that, the parties could file a notification fee of up to E600 000 for the acquisition of an asset of say E20 000,”averred Louw.
He further submitted that it was in the interest of business in Eswatini that a firm decision be given on this issue as the uncertainty sur

rounding whether or not a transaction was notifiable, simply on the basis of an acquisition of an asset, was having adverse effects on business abilities to engage without restriction in the kingdom.

Louw contended that the transaction between Siyembili Motors and MA Props was not one that was notifiable within the meaning of the Competition Act. 
The matter is still pending at the High Court and appearing for Siyembili are lawyers from Henwood and Company.

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