The Competition Tribunal would have considered charging Allied Technologies (Altech) punitive costs if it had the jurisdiction to do so. This is in light of the technology group's bungled intervention in the recent MTN-Verizon merger.
The competition body released a statement this morning explaining its reasons for awarding costs against Altech in the case dealing with the R1.4 billion merger between mobile operator MTN and Internet service provider Verizon Business SA.
The Competition Tribunal said this morning that Altech's intervention in the matter did not offer the tribunal what it promised, nor achieved what Altech sought.
“We understand our jurisdiction to award costs to be limited to party and party costs. Had we not suffered from this limitation, we would have considered this an appropriate case to award punitive costs against Altech.”
Wasted time
The deal, announced near the end of last year, was contested by Altech on several grounds and the company was set to go head to head against MTN at hearings in early January. However, Altech withdrew its intervention at the last minute, spurring a flurry of criticism from all parties, including the tribunal.
The Competition Tribunal subsequently awarded MTN and Verizon's hearing costs against Altech, a move which the telecoms company is contesting at the Competition Appeal Court.
In its statement this morning, the tribunal explained that Altech's sudden decision to back down was more than enough reason to award costs against it. “On 7 January 2009, the day prior to the date set for the hearing, we received a notice of withdrawal from Altech. The notice of withdrawal contained no tender to pay the merging party's costs in respect of the intervention application or the merger itself.”
At the time, sources close to the process revealed MTN, Verizon and the Competition Tribunal were not impressed with Altech's last-minute withdrawal, blaming the company for wasting time and money of the merging parties and their legal teams.
Out swinging
The tribunal has come back at Altech, saying the way in which it contested the merger between MTN and Verzion was designed to be open-ended. “The original intervention application... was open-ended about its concerns and concluded with the pessimistic assumption that the merger would result in incurable harm.”
It noted that Altech had no cause to be concerned about the merger in the first place. “There was no inkling until the MTN letter that Altech's chief concern was that it would face unfair discrimination and that a letter of comfort from MTN, let alone even a tribunal imposed condition to the same effect, would suffice,” explained its statement this morning.
It also said Altech knew the issue of costs for the intervention application had been reserved, and that it had no agreement with MTN and Verizon on the issue of costs. “It ought to have known that the issue of costs would as in the normal course, be disposed of at the hearing of the merger and that if it wanted to be heard on the issue, it would need to appear at the hearing. It chose not to do so.”
Grave digging
Altech's behaviour, in reaction to the MTN-Verizon merger, raised several eyebrows within industry.
In an interview with a daily paper late last month, the company implied it was still unhappy about the MTN-Verizon merger and was considering taking the matter to a higher authority. In the article, CEO Craig Venter pointed out that the J&J Group (which has former telecoms minister Jay Naidoo as a director) is the black economic empowerment shareholder in both Verizon SA and the merchant bank handling the transaction, Macquarie.
However, the company did not explain why it didn't bring the matter to the tribunal hearings.
Altech again had industry shocked when the company made pointed accusations at the Competition Tribunal, saying one panel member had been an ex-employee of MTN. Venter subsequently apologised; however, the tribunal was not placated.
Many industry watchers have noted that Altech may well have destroyed its reputation with the Competition Tribunal for good.
Related stories:
Altech hits back at criticism
Altech backs off MTN, Verizon deal
Tribunal sees Altech's apology as 'partial'
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