Kema Challenges Commission

Kema targets Competition Commission for answers

Iron Lady. Phindi Kema continues her crusade

Iron Lady. Phindi Kema continues her crusade

The long running battle between Phindi Kema’s Africa Race Group (Pty) Ltd (ARG) and various SA horseracing interests in the corridors of the Competition Commission has taken a further twist with ARG having now demanded an explanation for what may be seen as a dragging of heels by the commission.

In typically cavalier fashion, the complainant has written to the South African Competition Commission asking for an account of its findings and activities over the last two years in relation to the long-running anti-competitive investigation.

This followed a notice from the Competition Commission advising that Phindi Kema’s complaint would expire on June 18th 2013 and requesting an extension to allow it to finalise the investigation.

Kema’s attorneys argue though that this latest delay is causing ARG and its partners financial distress, as they have been funding the process for two years, and the extension is allowing Phumelela to continue enjoying its monopoly on racing in South Africa which is at the very heart of the original dispute.

“In the interest of transparency and good governance, I believe it is important that the Competition Commission complies with my request for a full and complete breakdown of what they have found and achieved in the two years since I lodged the complaint. The Commission last spoke to me on the matter the day I signed last year’s extension and now I am asked for another extension without any explanation. Is this how things work when you are perceived to be a small player who is in actual fact supposed to be protected by the Commission as stipulated in the Act?” said Kema.

She added: “While this case continues, ARG is currently not operating a business and therefore not generating any income. Another extension means we must continue funding travel and legal costs while our competitors continue trading unimpeded. To exacerbate matters, it appears that the costs incurred by myself are irrecoverable even if the parties are fined, the financial benefit goes to the Competition Commission. This whole situation is unfair and unacceptable.”

Major Player. Phumelela are Africa's major player

Major Player. Phumelela are Africa’s major player

ARG was granted a landmark hearing by the Competition Appeal Court judge president for Kema’s side to be heard by the Competition Appeal Court of South Africa. It is the first time that the Competition Appeal Court will hear the applicant that was not an intervening party before the Competition Tribunal trial.

This effectively tests whether non-parties to a merger have a legal standing to appeal against a Competition Tribunal’s decision.  The Parties will present their argument before the Competition Appeal Court Judge President Dennis Davis.

Kema  objected to the planned mergers that would ultimately see JSE-listed Phumelela administering Gold Circle’s Western Cape operations and therefore enjoying control in 8 of South Africa’s 9 provinces . This would give the two companies a complete monopoly on betting licenses and racing operations in South Africa.

The Competition Commission originally upheld ARG’s objection but the decision was reversed by the Competition Tribunal when the Parties took the matter on review and the merger was approved in November 2012.

ARG issued a notice of its intention to appeal the Competition Tribunal decision and in March 2013 the judge president of the Competition Appeal Court (CAC) was asked to give a directive on ARG’s legal standing to appeal against a Competition Tribunal’s decision.

The Competition Appeal Court has notified the parties to present their legal arguments on the matter. It is set down for September 2013.

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