CAPE TOWN - The Competition Commission has referred motor vehicle finance institutions FirstRand Bank Limited, Wesbank, and Toyota Financial Services South Africa Limited (TFS) to the Competition Tribunal for prosecution on allegations of dividing the market by allocating customers or suppliers.
The Commission said in a statement on Thursday morning that it had probed anti competitive behaviour, which led to its decision.
“FirstRand through its WesBank division and TFS are involved in the provision of vehicle finance services.
“They are therefore supposed to compete.
“They, however, concluded a shareholder agreement which contains clauses that prevent them from competing.
“FirstRand, TSA Investment Holdings Limited and Toyota Motor Finance (UK) PLC have 33.3% share each in TSA.
“They concluded shareholder agreement which include clauses that prohibit WesBank from offering vehicle finance to customers seeking to purchase vehicles at authorised Toyota dealerships.
“Further, the agreement identifies the vehicle that Wesbank is prohibited from financing, and these are the ‘new’ Toyota, Lexus and Hino vehicles and any ‘used’ vehicles sold through any two authorised Toyota dealership, except McCarthy Group.
“This arrangement constitutes market division by allocating customers or suppliers in contravention of section 4(1)(b)(ii) of the Act.
“This type of collusive conduct is harmful to the consumers as it deprives them of the benefits which arise from competition.
“Such agreements are inherently inimical to competition and the Commission has asked the Tribunal to fine the companies 10% of their turnover. ”
Cape Times