Analysts on Tuesday expressed fear that the conclusion of the enquiry on why Innscor acquired a majority stake in National foods may be protracted.
Innscor could face a penalty from the Competition and Tariff Commission (CTC) for not giving notice of its intent to acquire a majority stake in National Foods.
“The conclusion of the enquiry might be protracted, in our opinion,” analysts said on Tuesday.
“In our view, Innscor was not involved in the milling business prior to the acquisition of a stake in Natfoods. Furthermore, the Vice Chairperson of CTC clarified at the hearing that being a dominant player was not unlawful but what is not permissible according to the Act is the abuse of that dominance through price manipulation.”
It is alleged that Innscor gradually increased its shareholding in Natfoods but failed to notify the relevant authorities in particular CTC of the process.
Innscor is said to have only given notification of the acquisition when investigations into the move had already started. Innscor acquired a 26% stake in NatFoods in 2003 and increased it to 49.9% in 2011 but later sold around 11% in 2012 to Tiger Brands to remain with approximately 37.82%.
At the hearing held last Friday, Innscor said they were not in a position to respond as submissions made related to restrictive practices and not on the acquisition as earlier been planned.
Furthermore, none of the group’s units, for example, Natfoods were present to make their defense submissions. The Chairman of CTC, Dumisani Sibanda gave Innscor 21 days to make their submissions.