Money issue hinders ICCC work

The National Business

MONEY constraints faced by the Independent Consumer and Competition Commission (ICCC) is always a setback when reviewing mergers and acquisitions.
“For example, the review of the 2011 Steamships acquisition of Consort alone has cost the ICCC in excess of K2 million,” Emmanuel Auru, manager mergers and acquisitions (M&A), said.
“This amount only includes costs for engaging external consultants and lawyers, instituting legal proceedings and conducting market enquiries.
“It has since been over years and a trial date has still not been set by the courts. The ICCC fears that the total cost will only increase once a trial date is set and hearing commences.
“Recent budget cuts to ICCC’s annual budget means that instituting legal proceedings to review completed M&As, will only increase the strain on the ability of the ICCC to effectively monitor, regulate and enforce the M&A provisions of the ICCC Act.”
Auru said it took a long time to review consummated M&As, an average of two years to complete investigations of consummated M&As.
“This is in stark contrast to those reviews that the ICCC undertakes when businesses apply for clearance or authorisation which takes not more than two months to complete. The following consummated acquisitions that the ICCC undertook highlights this point:

  • Investigations into Global Ltd’s acquisition of Coconut Oil Product Madang Ltd started on August 24, 2011, and was completed on July 8, 2013;
  • Review into Steamship’s acquisition of shares in Consort started on May 11, 2011, and is now into its seventh year;
  • Review of New Britain Palm Oil Limited’s acquisitions of shares in Cargill Holdings CTP (PNG) Ltd started on May 15, 2012, was time barred;
  • Investigations into Digicel’s acquisition of shares in Channel 8 Ltd and Hitron Ltd started on Nov 18, 2014, and was closed on Oct 26, 2016, and; and
  • Enquiries into Exxon Mobil PNG Ltd’s acquisition of InterOil Corporation Ltd’s interests in the Papua LNG project started on Aug 17, 2016, and was completed onJune 5, 2017.

Auru said there were some consummated M&As that the ICCC initiated a review of and completed investigations in the same year, mainly because the acquirers in those acquisitions had provided the ICCC with timely relevant information and documents.
“For example, the ICCC’s investigation into Bank South Pacific’s acquisition of five Westpac branches in the Pacific commenced on April 29, 2015, and was completed on May 26, 2015. Similarly, investigations into Kina Group’s acquisition of Maybank Ltd commenced on Aug 5, 2015, and was completed in the same year.”