Johannesburg - The Competition Tribunal has confirmed a settlement between the Competition Commission and Steinhoff International, Loungefoam, Feltex Holdings and Kap Raw Materials and Kap Industrial Holdings for non-notification of a merger.
The companies have agreed to pay a R1.75 million fine for failure to notify the commission of a merger prior to its implementation.
Steinhoff has exercised control over Loungefoam since April 1999 but it acquired sole control of Loungefoam on September 1, 2003 when it bought 47.5 percent of the company.
The commission found the acquisition by Steinhoff of sole control of Loungefoam constituted a merger and that the company failed to give notice of the merger.
Hamilton Maenetje, appearing for the commission, told a tribunal hearing on Thursday that the penalty was negotiated between the parties and was not based on any consideration of the annual turnovers of the companies involved.
Read also: Companies agree to fine for non-notification of a merger
The settlement agreement follows the commission in September 2007 initiating a complaint against the parties for contraventions of the Competition Act. The commission investigated the complaint and referred it to the tribunal in September 2008.
It alleged Loungefoam and Vitafoam agreed to fix the selling price of the foam they produced and the benchmark price they used to negotiate the purchase price of the chemicals used producing foam was in contravention of the act.
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