Tension is brewing at the Competition Commission as employees accuse commissioner Doris Tshepe of poor management and extravagance, and of pushing through rulings that harm the economy, including blocking Vodacom’s R13bn bid for Remgro’s Maziv fibre assets.
They have also accused her of ignoring conflict-of-interest concerns involving her spouse, who is a lawyer and does work for the commission.
There has been widespread condemnation of a ruling, later endorsed by the Competition Tribunal, that blocked Vodacom’s proposed acquisition of a stake in fibre infrastructure group Maziv. The deal would have resulted in the telecom giant transferring its fibre business to Maziv, the owner of Dark Fibre Africa and Vumatel.
Sources at the Competition Commission who spoke to Business Times this week said the four commissioners were split on the decision to block the Vodacom-Maziv deal.
They accused Tshepe and chief economist James Hodge — who also serves as an acting deputy commissioner — of ramming through the ruling when other commissioners had disagreed, arguing such a transaction would benefit the economy.
A senior executive at the commission, who asked not to be identified, described the ruling as “irrational”, adding that public policy should prioritise comprehensive economic and social progress, and that the implementation of competition policy should be integrated within the same framework.
“Our legislation is forward-thinking, explicitly incorporating considerations of industrial growth, job creation and transformation into the assessments made by competition authorities regarding specific transactions,” the executive said.
“This is clearly articulated in the preamble of the Competition Act. It is what makes the Vodacom decision irrational.”
Vodacom and Maziv have filed notice to appeal the Competition Tribunal’s decision.
Trade, industry and competition minister Parks Tau, whose department oversees the Competition Commission, is also appealing.
With the tie-up, we’d be able to do in three to five years what would otherwise take 10 to 12 years
— Pieter Uys, head of strategic investments at investment holding company Remgro
Experts say the commission’s decision makes a mockery of government assurances to investors that South Africa is open for business.
In an interview with Business Times two weeks ago, Pieter Uys, head of strategic investments at investment holding company Remgro, which owns 57% of Community Investment Ventures Holdings, Maziv’s parent company, said:
“This is not the message we want to send out to the world. The president [Cyril Ramaphosa] stands up every year and says he’s calling the industry to commit to infrastructure investment. This is a perfect example of infrastructure investment, and the public interest benefits we’ve committed to make it a no-brainer.”
He said the decision would delay investment in fibre in the townships. Maziv has committed R10bn over the next five years to getting fibre to at least 1-million homes. The proposed tie-up with Vodacom would add R15bn and increase the number of homes tenfold.
“With the tie-up, we’d be able to do in three to five years what would otherwise take 10 to 12 years,” Uys added.
Commission spokesperson Siya Makunga said the regulator had a mandate, as set out in the Competition Act, to promote and maintain competition and fair, efficient and inclusive markets that work for firms, consumers and workers.
“Competitive markets are critical to inclusive economic growth, which has always been a key priority of the South African government, including the seventh administration. In line with its prioritisation framework, the commission also proactively prioritises its work in line with the priorities of government,” he said.
Makunga said it was incorrect to characterise the commission’s decision on the Vodacom-Maziv merger as not being in the interests of the economy. “The commission took a decision on this matter in August 2023, in line with the prescripts of the Competition Act,” he said.
Daryl Dingley, a partner at law firm Webber Wentzel, said “typically the Competition Commission and Minster are aligned and this development reflects that the Commission is exerting its independence and the Minister is exerting his rights to appeal, which is welcomed.”
However, the development around the appeal “demonstrates an ideological clash between the commission and the minister”.
“The minister is putting investment into digital infrastructure over the commission’s ideological approach that increased concentration harms consumer welfare,” Dingley said.
In January this year, disgruntled staff members of the commission wrote to Tau’s predecessor, Ebrahim Patel, raising serious issues with Tshepe’s conduct and management style. They accused her of negligence and underperformance, among other matters.
In the letter, which Business Times has seen, they said operational performance has declined since Tshepe took over. They alleged that new cases were not being initiated and old cases were stuck at the investigation level and not referred for adjudication. They also alleged Tshepe did not have time to understand cases before the commission as she is always on international trips. They said she had cut budgets on cases, citing limited resources, while wasting money on expensive catering, conferences and dinners.
“She loses the moral high ground with her lavish ways, with international trips, internal staff meetings with catering, conference dinners and year-end functions. The events are becoming more elaborate, with alcohol purchased at (the commission’s) expense and venues booked for wedding-like events, all in complete disregard of the PFMA [Public Finance Management Act] and National Treasury instructions,” their letter states.
The commission did not directly respond to questions on the allegations. Tau’s spokesperson didn’t respond to requests for comment either.
It is understood the commission missed an August deadline to submit its 2023/24 annual report to the department for review in parliament, the first time this has happened.
Makunga said the audit had not been finalised by the end of August 2024, hence the delay. He said the annual report had since been tabled before parliament and the commission has submitted it to the department.
She loses the moral high ground with her lavish ways, with international trips, internal staff meetings with catering, conference dinners and year-end functions
Employees also raised concerns about a conflict of interest involving one of the country’s eminent competition lawyers, Ngwako Maenetje SC, who is married to Tshepe. They said he continued to render paid legal services to the commission.
Contacted for comment on Friday, Maenetje disputed this, saying he was only completing cases he had taken on before his wife became commissioner.
“I have not been offered nor accepted any new instruction or brief from the commission. I have no intention nor interest in taking any new instructions from the commission, even if offered, for as long as my wife is the commissioner,” he said.
“I have two cases that I am completing for the commission that I was instructed and briefed on before my wife became the commissioner. I previously offered to return these two instructions to the commission via Mr Bukhosibakhe Majenge, the head of legal services and acting deputy commissioner.
“He explained that instructing new counsel on these matters would be costly for the commission. Mr Majenge assured me that my wife is not involved at all in my work in the two cases, nor in approving any of my invoices for work done,” Maenetje said.
Makunga said the conflict of interest issue was a repeat of complaints submitted to the minister at the time and “were addressed to the satisfaction of former minister Patel”.
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