Days after being fined R35 million for administrative shortcomings, the green bank was in trouble again and slapped with a R2 million fine for contravention of the Competition Act.
The fine relates to them implementing a transaction prior to obtaining the approval of the competition authorities.
Gillian de Gouveia, Communications Officer for the Competition Tribunal, said that the tribunal could confirm that as an order, a consent agreement wherein Nedbank Limited and Erf 7 Sandown (Pty) Ltd admit that they contravened section 13A (3) of the Competition Act by implementing a transaction prior to obtaining the approval of the competition authorities.
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The consent agreement was concluded between the Competition Commission, Nedbank and Erf 7.
She said: “Nedbank and Erf 7 accept that they are jointly and severally liable to pay an administrative penalty, the one paying, the other to be absolved. Nedbank will pay the administrative penalty totalling R2 million.”
Bank undertakes to clean up its act
Nedbank and Erf 7 have also undertaken to notify the Commission of any future transactions that constitute a notifiable merger, to refrain from engaging in prior implementation of notifiable mergers in contravention of the Act and to update their corporate governance by enhancing Nedbank’s competition law compliance programmes to ensure that its employees, management and executive directors do not engage in future contraventions of the Act.
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The bank also agreed to submit a copy of their competition law compliance programme to the Commission.
The Commission’s investigation found that Nedbank, through Nedbank Property Partners, a Division of Nedbank Corporate and Investment Banking, acquired the remaining shares in Erf 7 when exercising its security rights in a risk mitigation transaction.
After Nedbank exercised its security interest, it acquired sole control of Erf 7 effectively from 24 August 2017.
The Commission found that this transaction constituted a merger and was notifiable in terms of section 13A of the Act; and that Nedbank and Erf 7 implemented this transaction without prior approval and therefore contravened section 13A( 3) of the Act .
On 5 August 2021, Nedbank and Erf 7 filed the transaction with the Commission.
In the merger filing, they acknowledged that the transaction was a notifiable large merger and that their conduct of implementing the merger without the required prior approval was an unintentional contravention of the Act.
Following the voluntary disclosure made by Nedbank and Erf 7, the Commission assessed the large merger and recommended to the Tribunal that the transaction be unconditionally approved. The Tribunal approved the large merger without conditions.