The Competition Authority (CA) has laid out the rules of the game to both G4S and Shield security companies, restraining the former from soliciting current clients of the latter for a period of two years.
The move comes after the owners of Shield Security last month recommended their clients to G4S Security after the CA refused a takeover between the two companies while Shield prepared to wind up business by the end of last month.
The action was read as one aimed at frustrating the decision of the Competition Authority after it had rejected the merger by the two companies.
The restraint, according to the CA, shall only lapse and be of no further force and effect under two conditions. One being that “Shield closes down business or sells its business subject thereto that the closing down is not due to the fact G4S directly or indirectly solicited Shield clients”, this according to a letter written to both security companies by the Competition Authority Chief Executive Officer, Thula Kaira.
The other condition is that there must be a change in the management control in Sancos M.D Enterprises (Pty) Ltd, which trades as Shield Security.
G4S director, Moraki Mokgosana, would not say whether or not his company would abide by the restraining directive from CA.
“We will have a press conference where we will make necessary public announcements,” he said on Monday.
It was not possible to get immediate comment from Shield under the new management as the former manager, Rockie Mmutle, said that he is no longer in charge at Shield Security.
The CA says considering the fact that Sancos M.D. Enterprises (Pty) Ltd is a shelf company owned by an existing shareholder of Facilities Management Group and that Shield is re-positioning its market existence following the rejection of the take-over transaction involving G4S, the Authority says it does not consider the transfer of Shield Security business and assets to Sancos M.D to be a notifiable transaction.
“We understand that the parties to this whole issue have a transition period of a maximum of 3 months (with effect from 1 June 2012) to transfer the relevant staff and assets, during which period G4S shall not interfere with the clients of Shield Security. We further understand that in the event that the parties need a longer transition period they shall notify the Competition Authority accordingly,” wrote Kaira.
Meanwhile Shield Security has laid off all its alarm technicians. Again it was not possible to get comment why the technicians had been retrenched.