The Namibian Competition Commission (NaCC) has imposed a fine of N$5 million on Fan Qingmei, Wang Zhongke, Hong Xiang Holdings LTD and Whale Rock Cement (PTY) LTD for contravening Chapter 4 of the Competition Act 2 of 2003.
This settlement comes after an investigation revealed that the parties implemented a merger without the Commission’s approval, violating Sections 42(1) and (2), 44, 51, and 53 of the Act.
According to NaCC’s Corporate Communications Practitioner Dina //Gowases, the Commission’s investigation detected that Zhongke acquired Hong Xiang Holdings shares from Qingmei, leading to a change of control in Whale Rock Cement.
Hong Xiang Holdings, which holds a 70% share in Whale Rock Cement, effectively made Zhongke’s acquisition a merger that fell within the notification thresholds, which were not adhered to.
“The acquisition would have resulted in an effective monopoly in the production and supply of cement in Namibia, likely causing anti-competitive effects,” said //Gowases.
She said this finding emerged from a separate investigation into a merger between West China Cement Limited and Schwenk Namibia (Proprietary) Limited, prohibited in 2020 for its potential to lessen competition in the cement market.
Meanwhile, “the parties agreed to settle the matter, paying the N$5 million penalty and implementing a compliance programme on competition law in Namibia. The settlement agreement was made an Order of the High Court on 29 July 2024, under case number HC-MD-CIV-MOT-GEN-2022/00546.”
The Commission highlighted the economic benefits of merger regulations, stating “competitive markets incentivise innovation, enhancing economic development and consumer welfare”.
Merger regulations prevent market structures that could lead to anti-competitive conduct, ensuring that merging firms do not abuse market power to raise prices, reduce quality, or limit customer service.
The NaCC encourages stakeholders to remain compliant with the Competition Act and seek advisory opinions from the Commission when unsure about the notifiability of transactions.
“The Commission wishes to encourage concerned stakeholders to ensure that they remain in compliance with the Competition Act, specifically Chapter 4. Where stakeholders are not sure whether the transactions they wish to pursue are notifiable or not, the Commission encourages such stakeholders to approach the Commission and seek an advisory opinion before proceeding,” //Gowases said.
