Cosatu backs bid to revoke Premier-RFG merger approval
Cosatu in the Western Cape yesterday threw its support behind the application by the Competition Commission to revoke the approval of the merger between Premier Group and RFG amid denials by Premier in withholding information about the planned closure of its Tulbagh fruit-canning facility.
The South African trade union federation Cosatu has endorsed the Competition Commission's motion to annul Premier Group's acquisition of RFG Holdings. Premier Group, however, denies allegations that they concealed plans to shutter their Tulbagh fruit-canning facility. The labor union's provincial secretary, Malvern de Bruyn, commended the commission for its prompt and decisive actions in preserving the integrity of South Africa's regulatory system.
According to de Bruyn, the Competition Act empowers regulators to revoke merger approvals when transactions are based on misleading or incomplete information. The Commission filed the application six months after the Competition Tribunal approved Premier Group's takeover, imposing employment safeguards as a condition of the merger.
The Commission's investigation discovered that Premier Group and RFG Holdings had not disclosed details about the potential closure to the Commission and the Tribunal. The Commission found that the companies failed to inform the authorities about the planned closure of RFG's fruit-canning facility, which is one of only two in the country, four months after the merger was implemented.
Cosatu estimates that 400 workers, 200 farmers, thousands of farmworkers, and five rural communities would suffer devastating consequences if the jobs were lost.
The Competition Commissioner, Doris Tshepe, stated that withholding vital information undermined the legitimacy of the merger-control regime and may lead to the annulment of the approved merger. She emphasized that the Commission must receive complete, truthful, and full disclosure of all material information to accurately evaluate the competition and public-interest consequences of a transaction.
Premier Group maintained that it had been transparent and provided the Commission with a comprehensive timeline of events and supporting materials relating to the decision-making process.
De Bruyn expressed anticipation for the tribunal's decision, stating that if the merger is revoked, the scandal would be viewed similarly to the Steinhoff and other corporate failures. Despite the controversy, Premier Group has not laid off any employees following the voluntary severance agreements reached with 407 out of 409 workers during the CCMA-facilitated consultation process. The company remains committed to minimizing the impact on affected stakeholders.
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