Johnnic Holdings Limited and Hosken Consolidated Investments Limited CC (65/FN/Jul05) [2005] ZACT 69; [2005] 2 CPLR 508 (CT) (21 October 2005)

Johnnic Holdings Limited and Hosken Consolidated Investments Limited CC (65/FN/Jul05) [2005] ZACT 69; [2005] 2 CPLR 508 (CT) (21 October 2005)

The Tribunal found that HCI's 40% shareholding in Johnnic did not constitute control under section 12(2)(g) of the Competition Act, given the presence of substantial and experienced institutional shareholders holding the majority of shares and the lack of board representation or voting arrangements by HCI. There was no evidence of joint control with shareholders who had given irrevocable undertakings to sell shares. The Tribunal distinguished the present case from the Gold Fields/Harmony cases, noting the absence of a voting agreement or coalition that would guarantee control. The Tribunal held that mere intention to merge or incremental acquisitions do not amount to unlawful...

Citation
[2005] ZACT 69
Parties
Applicant: Johnnic Holdings Limited; Respondent: Hosken Consolidated Investments Limited; Respondent: Competition Commission
Court
Competition Tribunal
Jurisdiction
South Africa
Judgment Date
21 October 2005
Case Number
65/FN/Jul05
Procedural Posture
Urgent Application / Application for Declaratory and Interdictory Relief Prior to Merger Approval
Outcome
Application dismissed with costs, including costs of two counsel.
Judges
L. Reyburn, D. Lewis, T. Orleyn
Legal Topics
Merger Control, Implementation Prior Approval, Material Influence, Declaratory Relief, Interdict, Control Definition
Competition Law Merger Control Implementation Prior Approval Material Influence Declaratory Relief Interdict Control Definition

Case Brief

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Parties

Johnnic Holdings Limited

Applicant

Hosken Consolidated Investments Limited

Respondent

Competition Commission

Respondent

Procedural Posture

Urgent Application / Application for Declaratory and Interdictory Relief Prior to Merger Approval

Legal Issues

  1. 1 Whether HCI's acquisition of 40% of Johnnic's shares constitutes control under section 12(2)(g) of the Competition Act.
  2. 2 Whether HCI's actions amount to unlawful implementation of a proposed merger prior to competition authority approval.
  3. 3 Whether Johnnic is entitled to declaratory and interdictory relief restraining HCI from exercising voting and other rights in Johnnic.

Ratio Decidendi

The Tribunal found that HCI's 40% shareholding in Johnnic did not constitute control under section 12(2)(g) of the Competition Act, given the presence of substantial and experienced institutional shareholders holding the majority of shares and the lack of board representation or voting arrangements by HCI. There was no evidence of joint control with shareholders who had given irrevocable undertakings to sell shares. The Tribunal distinguished the present case from the Gold Fields/Harmony cases, noting the absence of a voting agreement or coalition that would guarantee control. The Tribunal held that mere intention to merge or incremental acquisitions do not amount to unlawful...

Court Disposition

Application dismissed with costs, including costs of two counsel.

Orders

  • The application by Johnnic Holdings Limited is dismissed with costs, including the costs of two counsel.