Regulators set for battle over Nedcor-Stanbic merger
JURISDICTION DISPUTE
By AMANDA VERMEULEN
THE Competition Commission and the Registrar of Banks are pitched for a court battle as both claim jurisdiction over the proposed Nedcor/Standard Bank merger.
Affidavits in response to Stanbic's legal action to gain clarity on regulators' roles point to conflicting interpretations.
Stanbic launched the action in December after statements were issued by the two regulators about who should assess the merits of the transaction.
The registrar, Christo Wiese, claims authority to decide on the merger, while the commission also believes it is entitled to do so. Both are working on a memorandum of understanding (MOU) to make a dual assessment of the matter possible.
Wiese says in his affidavit he was advised that the Competition Act did not apply to the proposed merger, and that he was required to do no more than consult with the commission.
He also says the competition issue - which is not the registrar's responsibility - may in certain circumstances be superseded by the interests of depositors or of financial stability.
Although he said he had not prejudged the merits of the merger, Wiese went on to say: "While the proposed merger may have far-reaching economic consequences, it may also have a salutary effect on the creation of an internationally competitive financial institution which may well be in the interest of the SA public. The concern regarding the loss of employment is, however, a very real one.
"It will not be in the public interest if the creation of a vehicle, which will make the country internationally competitive, is stifled because of considerations relating to a more cumbersome consultative process described in the Competition Act where people are consulted who are not part of the corporate governance or body of depositors in the companies (affected by the proposed merger)."
The registrar's role is to ensure the safety of the public's deposits with banks, the maintenance of a sound banking system, and a stable financial system.
Wiese also attacked Stanbic for disclosing the MOU details, saying its inclusion in the Stanbic affidavit was "premature, if not unchivalrous".
While Wiese said he was under no obligation, in terms of the Banks Act, to hear Stanbic's opposition to the Nedcor merger proposal, Finance DirectorGeneral Maria Ramos said in her affidavit that the Finance Minister would hear both parties.
Without providing an explanation, Ramos said Stanbic had materially misstated the terms and effect of the MOU. "The document is still no more than a draft, which has not been accepted."
In his affidavit, Competition Commissioner Menzi Simelane said the authority had "never accepted the contents of the MOU.
"(The commission believes) that there is dual jurisdiction in respect of this matter. It has always been the intention of the commission that the MOU should recognise the jurisdiction of the commission and the application of the Competition Act."
He said the commission had already started investigating the matter.
Simelane said a view had been received from Advocate IAM Semenya, SC, on whether the Competition Act was applicable. He said Semenya's view indicated its jurisdiction was not excluded, and "that it intended to apply all the relevant provisions of the Act to the merger". Nedcor chairman Chris Liebenberg also submitted an affidavit.
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