Wednesday, May 22, 2024

Competition Commission sits for first hearing of BOMAID – MRI ruling

The Competition Commission sat for the first time since inception as a tribunal to consider an application against a decision of the Competition Authority. Not only was the Friday 11 January 2013 meeting a historic first but the Commission went on to deliver a landmark decision.

The Commission sat to consider an application lodged by BOMAID against a decision made by the Competition Authority to reject the proposed acquisition of shares in MRI Botswana Limited by the Botswana Medical Aid (BOMAID).

Bomaid, represented by attorney Sipho Ziga of Armstrongs Attorneys, argued that a Competition Authority decision is properly placed to be heard by the Competition Commission instead of a direct appeal to the High Court of Botswana.

There have been divergent interpretations of the Competition Act on whether decisions of the Competition Authority Merger are appealable to the Competition Commission like all other competition issues or not. The decision, signed by the Chairman of the Competition Commission, Dr Zein Kebonang, reads in part: “After careful consideration, the Commission determined that it does have the power to hear appeals against the decision of the Competition Authority on mergers. Consequently, you are advised to file your appeal with the Commission.”

The Competition Authority had rejected the proposed acquisition of shares in MRI by BOMAID citing public interest concerns.

“The Authority notes that since BOMAID is already in possession of majority shares in MRI Botswana, the shares currently held by CEDA Venture Capital Fund Limited should be sold to other citizens who are not already part of MRI Botswana. This is meant to ensure that more citizens are economically empowered and wealth is distributed amongst other citizens. The Authority is of the view that the parties to the transaction should seek other alternative citizen buyers to acquire the shares owned by CEDA Venture Capital Fund Limited. Pursuant to the provision of Section 55 of the Competition Act, the Authority has rejected the proposed acquisition,” reads the decision of the Competition Authority when rejecting the proposed transaction.

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