Johannesburg - Healthcare company Netcare on Friday lost its bid to have KPMG blocked from working on a market inquiry into the private health sector, the Competition Commission said.
The High Court in Johannesburg dismissed Netcare's application to stop the commission from using KPMG's services as technical advisers in the inquiry.
Citing its grounds for the application, Netcare had said there was a conflict of interest, as KPMG had previously done work for them and had access to their confidential documents.
The court, however, dismissed Netcare's application with costs, said commission spokesman Mava Scott.
He welcomed the ruling.
“The judgment vindicates the position of the commission that parties in the health sector need to co-operate fully with the health inquiry rather than seek to derail it as in the case of Netcare.
“In the light of this judgment, the commission is now confident that the health inquiry will proceed in full swing,” Scott said.
The inquiry is headed by former chief justice Sandile Ngcobo.
In April, Ngcobo said the primary focus would be to determine if competition in the sector was working or could be improved. The inquiry was triggered by concerns about the functioning of markets.
Its mandate is to find the likely causes of price increases and expenditures that tend to be above inflation in the sector.
The inquiry will make recommendations on appropriate policy and regulatory mechanisms to support accessible, affordable, and quality private healthcare.
It will also make recommendations on whether price-setting mechanisms are acceptable.
Ngcobo said a whole range of findings could be reached, including that the market was not functioning well.
While the dates for the inquiry had not yet been set, it was expected to start in March 2015.
Netcare said it was disappointed with the court ruling.
“On a preliminary consideration of the decision, Netcare respectfully believes that the decision is premised on material errors of fact and law,” spokeswoman Martina Nicholson said in a statement.
“Netcare is considering its options in light of today’s ruling which has significant implications for corporate South Africa.
“Netcare is of the opinion that companies will need to give careful consideration to the way in which they engage professional services companies in light of the ruling.”
The company said its court action was not about delaying the healthcare inquiry or withholding any information.
“Netcare is currently participating in the commission’s inquiry and has already made substantial submissions in response to various requests from the panel which is conducting the inquiry. Netcare will continue to engage with the panel as the inquiry unfolds and is participating fully in the process.”