Tribunal tips its hat to Caxton the policeman
An R800,000 fine is a bitter pill for struggling newspaper The Witness, but is a slap on the wrist for its ultimate owner, R1.2-trillion market cap behemoth Naspers.
Rival newspaper owner Caxton’s call to have this fine escalated to potentially R40m — R20m payable immediately with the threat of another R20m if any firm within the Naspers stable fails to notify the Competition Commission about any acquisitions within the next five years — was rejected by the Competition Tribunal.
The tribunal said a penalty had to be high enough not to become a cost of doing business, but not so high that it was disproportionate to the crime.
While Caxton failed to convince the tribunal R800,000 was too low to “induce a sense of shock”, it did score some points against Naspers. The tribunal said normally it would have awarded Naspers costs, but in the case the larger group has to pick up its own lawyers’ tab because without Caxton’s persistence, the competition authorities would not have discovered that The Witness acquired the proprietor of isi-Zulu newspaper Ilanga, Mandla-Matla, without getting the required permission.
Justifying its decision not to award costs, the tribunal said: “Private enforcement should not be chilled despite the fact it may be brought about for motives other than a concern about anticompetitive effects .... the system benefits from the actions of a private policeman whatever its motives.”
The acquisition about which the parties failed to notify competition authorities took place a month before Naspers bought its initial half of The Witness in December 2000, though it was finalised only once the parties were in the Naspers stable.
Energy investment company Hulisani thinks a factory near Cape Town making wind towers, GRI Wind Steel SA, is a fine place to put its money, even though Eskom’s refusal to sign new deals with independent power producers has paralysed the growth of SA’s renewable energy sector.
While SA’s once successful renewable energy sector is now in the doldrums, the rest of the world is forging ahead with wind and solar installations. GRI Wind Steel SA, as part of a global group, will market its products elsewhere. Ironically, if SA ever unlocked the renewable energy programme, its wind towers may have to be imported.
Eskom’s narrow self-interest has added to the growing list of reasons why foreign investors are shunning SA. It rejects clean renewable energy while growing the share of polluting coalfired energy and finding excuses not to fit air-purifying technology to its old power stations. Its claim that renewable power is unaffordable is hollow, since costs are recovered from consumers. The reluctance to embrace renewable energy seems to be rooted in resentment at having to buy energy from the private sector.
Although this is a relatively small investment for Hulisani, it helps to diversify its portfolio. Its first two acquisitions have been in a solar photovoltaic plant and a wind farm, both of which are supplying Eskom on long-term contracts with tariffs rising in line with the consumer price index. Profit from GRI Wind Steel could grow at a faster rate, since the factory will earn foreign currency and there are predictions of a global shortage of wind turbines.