The competition commission may lay criminal charges against Vodacom representatives who lied to the regulator about the rational for the proposed takeover of Global Telematics South Africa (GTSA), as well as previous transactions that were approved by the commission.<\/p>\n
Yesterday the tribunal “unconditionally” approved the R206 million takeover of GTSA by Vodacom’s subsidiary, Vodacom Service Provider (VSP).<\/p>\n
This comes a week after it accused the country’s biggest cellular network provider of “blatant lies” in its competitiveness report in support of the GTSA transaction.<\/p>\n
Tembinkosi Bonakele, the head of mergers and acquisitions at the commission, said the regulator was investigating the tribunal’s charge that Vodacom misled the commission on its rationale for the deal.<\/p>\n
The commission’s probe is aimed at establishing whether any individual within Vodacom or outside misled the regulator. But the commission does not have the power to prosecute in criminal courts. Hence it would refer the matter to the relevant authorities. “It’s a criminal offence to lie to the commission,” Bonakele said.<\/p>\n
The commission is reviewing similar previous transactions by Vodacom, which might have been approved on the basis of false information.<\/p>\n
Vodacom spokesperson Dot Field said: “At no stage did [Vodacom] lie to the competition authorities on this or any previous occasion.”<\/p>\n
The tribunal described how Vodacom contradicted internal documents that revealed that the logic behind the acquisition was to remove a service provider that offered customers attractive discounts.<\/p>\n
The documents showed that the average retail discount offered by GTSA was 22 percent across its post-paid subscriber base. Vodacom’s levels were closer to 15 percent.<\/p>\n
Vodacom would therefore have effectively removed competitive quotes from the market with the acquisition.<\/p>\n
Vodacom’s competitiveness report says the acquisition is in line with its strategy of consolidating and owning more of its subscribers, improving its operating margins and bringing it closer to the customer.<\/p>\n
Bonakele said the commission had found nothing wrong with the proposed merger, because the contract between VSP and GTSA was expiring at the end of the month and GTSA customers would automatically revert to Vodacom.<\/p>\n
“It made no difference and we couldn’t force Vodacom to enter into a new agreement with Global Telematics.”<\/p>\n