Tribunal holds back Walmart info

Unexpected delay

Massmart was dismayed that the departments of Economic Development, Trade and Industry, and Agriculture, Forestry and Fisheries had been able, earlier this week, to force the tribunal to delay hearings on the deal. It said on Friday that the tribunal's decision to limit the departments' request for information to the economic effects of the deal, was "fair and equitable".

Nevertheless, it still has to deal with the unexpected delay in the hearings on the deal, which has already been approved by the Competition Commission.

The ministers were granted late access to the process after they complained that they had not been given access to information, although this is vehemently denied by Massmart.

Hearings on the merger, which were scheduled for this week, were postponed to 9-13 May, with 16 May reserved for legal argument. The departments, led by Economic Development, had requested additional information on the bid for a 51% stake in Massmart for R16.5-billion.

The tribunal's ruling is the last hurdle. Massmart's shareholders have voted in favour of the merger - despite strong opposition from unions.

'No reasonable grounds'

Grant Pattison, Massmart's CEO, said he was perplexed as to why the department asked for a postponement after the investigations and the discovery periods were concluded. He said minister Ebrahim Patel's department "never once in that six months period made a submission or a witness statement on the facts of the merger".

Walmart also does not believe that there are any reasonable grounds for further delay.

"We remain firm in our belief that Massmart is a compelling investment opportunity and look forward to being able to grow job opportunities and serve customers together," it said in an e-mailed statement.

Pattison said Massmart never had a chance to answer the department's "spurious" allegations that the company never gave it any information it had requested.

'Indulgence status'

Massmart had allowed the tribunal to grant the department an "indulgence" status as it had no right to participate fully in the hearings.

The company had submitted all the information requested by Patel's advisory panel on the merger deal on two occasions.

Pattison said at no stage during Massmart's interaction with the department or the panel was it ever communicated to Massmart that its responses were in any way incomplete, inadequate or submitted too late. In fact, it had furnished information in November, and then again in January after further information was requested.

A report compiled by the panel has not been made public.

Pattison said that by law, the department had no right to demand information from any company or even investigate it. Only the Competition Commission may do so during the investigation or discovery period.

'Social dialogue stakeholders'

According to Pattison, Massmart was asked by Patel to enter into nonbinding talks with what the minister called the "social dialogue stakeholders" - meaning the trade unions. This suggestion came after Patel had met with Doug McMillon, the president and chief executive officer of Walmart International in Davos during the World Economic Forum earlier this year.

Patel and McMillon discussed what Massmart understood was a pledge - a statement of intent which was later delivered to the minister.

He said legally the department could not force the retailer into signing an agreement with any other party.

Pattison said while he was given no indication that Walmart would pull out of the deal over the postponement, the issue of "regulatory clarity" was of great concern.

Source: Business Times