Comesa to penalise firms for late merger alert
The Comesa Competition Commission has imposed a fine on Helios Towers, Madagascar Towers and Malawi Towers for failing to notify it of a proposed merger within the stipulated time.
In what is a precedent setting move, the commission ordered the parties involved to pay a fine of 0.05 per cent of their combined turnover in the Common Market in the financial year 2020, for breaching Article 24 (1) of the Regulations.
Comesa regulations require that companies intending to enter into a merger must notify the commission not later than 30 days of the parties’ decision to merge.
Kenyans firms who have recently been on the regulators radar must note the move.
In the ongoing merger where Helios Towers is seeking to acquire shares of Madagascar Towers and Malawi Towers, however, the commission was notified of the decision to merge three months later.
“The fine was the first of a kind for breach of the Regulations. The Commission therefore wishes to remind Undertakings in the Common Market to be cautious of the prescribed timeline for notifying mergers in under Article 24 (1) of the Regulations,” said The Commission’s Registrar, Meti Disasa,
She further cautioned entities operating in the Common Market to comply with all Regulations especially with respect to anti-competitive conduct as the Commission shall henceforth not take lightly any breaches.
Regulations allow for a penalty of up to 10 per cent but the three were spared maximum penalty because the breach did not result in any harm in the market.
The primary objective of penalties, according to the Commission, is to deter future violations by the undertakings concerned and other would-be offenders.