Tourvest wins appeal in Acsa lease collusion case

After a year-long battle with competition authorities.
Competition authorities were also ordered by the Competition Appeal Court to pay the legal costs of Tourvest in relation to the appeal case. Image: Moneyweb

The Competition Appeal Court (CAC) has set aside the Competition Tribunal’s September 2019 judgment that Tourvest Holding’s and Siyazisiza Trust were guilty of collusive tendering or price fixing, in relation to a tender issued by Airports Company South Africa (Acsa) in 2013.

CAC – which handed down its ruling on 30 June 2022 – found that the tribunal’s collusion argument failed to hold water.

“Its [Competition Tribunal] collusion theory failed to take [into] account that the collaboration was disclosed and that there was no anti-competitive object which could be found in the MOU,” the CAC judgement partly read.

Therefore, CAC subsequently ordered the commission to pay the appellant’s costs including the cost of counsel.

Context

The unlisted tourism group found itself in a whirlwind of trouble when the Competition Commission received a collusive tendering complaint against it and the trust in April 2014.

The complaint was in relation to three Acsa tenders for a five-year space leasing opportunity at the OR Tambo International Airport.

Before bidding for the tenders, the parties – Tourvest and Siyazisiza – concluded a memorandum of understanding (MoU). During its investigations, the commission found that the parties through the MoU agreed to cooperate instead of competing.

Thus, the MoU concluded by Tourvest and Siyazisiza – in respect of opportunity 3 – was found to constitute a collusive agreement, contravening section 4(1)(b)(iii) of the Competition Act 89 of 1998 as amended, the commission noted.

At the time, the commission then ordered Tourvest to pay a R9.18 million fine, within 30 days.

The commission’s penalty was restricted to Tourvest and not the trust – which is a broad-based craft enterprise development agency that works with about 400 rural crafters.

Read: Tourvest fined R9.18 million for collusive tendering with Siyazisiza Trust

Damage already done

Accusations against the group and the trust came at a time when the country’s hospitality, tourism and leisure industry was making attempts to recover from the devastating blows dealt by the Covid-19 pandemic in 2020.

At the height of the pandemic, the industry was forced to reduce operations to fall in line with Covid-19-related regulations, which dictated operating times, alcohol sales and travel, in order to curb the spread of the coronavirus.

Tourvest CEO Sean Joubert welcomed CAC’s ruling on the matter, but says it comes a little too late, as the damage to its business and that of the trust has already been done.

“In the process of exploring its conspiracy theories directly linked to its ideological values, the Competition Tribunal damaged the trust’s reputation and its ability to access donor funding,” he says in a statement.

“Job creation and poverty alleviation projects were suspended and once again the marginalised people of this country paid the price.”

Joubert went further to add that the CAC judgement will now set a precedent in competition law.

“It further upholds and reinforces our fundamental business and ethical imperative to facilitate, develop and accelerate market opportunities for South African rural crafting communities,” he says.

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