The Competition Commission has laid charges with the police against a Vodacom executive for committing an offence in terms of section 73 of the Competition Act. "Section 73 provides that it is an offence to knowingly provide false information to the commission," the commission said in a statement on Thursday. The charges were laid on Wednesday at the Sunnyside police station in Pretoria.
The commission believes that the executive committed a criminal offence by intentionally provided false information to mislead the commission, in contravention of the Competition Act. "The penalty for these offences is a maximum prison sentence of six months or a fine of R2 000 or both," it said.
The commission was informed in December last year of the merger between Vodacom Service Provider Company (VSPC), a subsidiary of Vodacom, and Global Telematics SA and Glocell Service Provider Company. In terms of the structure of the transaction, VSPC was to acquire the business of Glocell. As part of the merger filing, the executive signed a certificate of accuracy on behalf of Vodacom, declaring that the information submitted to the commission in respect of the merger was "true and correct".
During its investigation of the transaction Vodacom had failed to provide the commission with board minutes -- despite requests for it to do so. The commission was led to believe that these documents did not exist. It then referred the matter to the Competition Tribunal for unconditional approval. The tribunal ordered Vodacom to provide the board minutes on March 6 -- and they were submitted on March 10. The merger was subsequently approved by the tribunal, but the tribunal expressed "misgivings about Vodacom's truthfulness during the investigation of the transaction". The tribunal said it believed that information was deliberately withheld from the commission. "In particular, the tribunal noted that the strategic rationale as contained in the board minutes of Vodacom differed substantially with the rationale submitted to the commission."
The commission subsequently investigated the matter and found that the rationale for the transaction was to eliminate Glocell because it was "providing discounts to customers in competition with Vodacom and other Vodacom service providers". Contrary to this, the rationale submitted by Vodacom to the commission "was primarily driven by the declining growth of the service provider market and the desire by Vodacom to consolidate its service delivery chains" in line with worldwide trends to have management over the delivery of a more uniform consistent service to its customers.
Comment from Vodacom could not immediately be obtained.
Source" Mail & Guardian -- Sapa
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