Dawn to appeal against ruling
Dawn will appeal against a Competition Tribunal decision last Thursday that one of its subsidiaries colluded with Sangio Pipe between 2007 and 2012. Dawn held 49% in the maker of high-density polyethylene pipe at the time.
Distribution and Warehousing Network (Dawn) will appeal against a Competition Tribunal decision that one of its subsidiaries colluded with Sangio Pipe between 2007 and 2012.
Dawn held 49% in the maker of high-density polyethylene (HDPE) pipe at the time.
The JSE-listed construction, building materials and fixtures supplier said it would appeal once a penalty had been determined by the tribunal.
The tribunal ruled last Thursday that Dawn Consolidated Holdings (DCH), a subsidiary of Dawn, through its wholly owned subsidiary DPI Plastics, had engaged in market allocation with Sangio. DCH bought the remaining 51% of Sangio in June 2014. Dawn says Sangio’s turnover then was R363m. It said on Monday the tribunal would weigh a number of variables in setting a penalty.
“The tribunal has not at this stage determined any financial penalty and this has been held over to a later date,” it said.
“In such cases, penalties are usually determined as a percentage of affected turnover [which] is usually that related to the market allocation arrangement in question.”
The Competition Commission, which referred the case to the tribunal in May 2015, welcomed the finding. “[The] tribunal said it is apparent that Dawn undertook not to manufacture HDPE piping for as long as it or its associates held shares in Sangio. Dawn also undertook to procure all its HDPE piping from Sangio,” it said.
Dawn’s share price plunged more than 31% on the JSE last Wednesday. This was attributed to a R350m rights issue, which had been priced at a steep discount. In February, Dawn signed a R200m bridging-loan facility with Investec.