Motor Vehicle Finance Institutions FirstRand Bank, Wesbank and Toyota Financial Services South Africa are taking legal advice and reviewing notices from the Competition Commission that the firms have been referred to the Competition Tribunal to face allegations of dividing the market by allocating customers or suppliers.
The financial services providers declined to be drawn on the matter when Freight News approached them for comment this week, saying only that their advisers were reviewing the notices.
The Competition Commission announced on Thursday that it had referred the firms to the tribunal and requested a fine of 10% of turnover if they are found guilty of allegations of dividing the market by allocating customers or suppliers.
The Commission said that its investigation had revealed that Wesbank and TFS had entered into an agreement to divide markets by allocating customers or suppliers in the market for the provision of vehicle finance in contravention of the Competition Act 89 of 1998.
FirstRand Bank Limited (FirstRand), through its WesBank division, and TFS are involved in the provision of vehicle finance services and are supposed to compete.
However, the commission said that they had concluded a shareholder agreement which contained clauses that prevented them from competing. FirstRand, TSA Investment Holdings Limited, and Toyota Motor Finance (UK) PLC, each have 33.3% share in TSA.
“They concluded a shareholder agreement which includes clauses that prohibit WesBank from offering vehicle finance to customers seeking to purchase vehicles at authorised Toyota dealerships,” the Competition Commission said.
The commission also found that Wesbank was prohibited from financing the “new” Toyota, Lexus and Hino vehicles and any “used” vehicles sold through any authorised Toyota dealership, except the McCarthy Group.
Responding to the allegations, TFS said: “Toyota Financial Services South Africa confirms receipt of a referral notice from the Competition Commission on allegations of ‘collusive’ behaviour.
“We have acknowledged the notice and are in consultation with our advisers on the matter. Further announcements will be made as and when the matter progresses,” TFS said.
WesBank Motor CEO Ghana Msibi declined to be drawn on the matter. “WesBank notes that the Competition Commission has referred a complaint against WesBank to the Competition Tribunal for adjudication.
“WesBank is reviewing the basis for the referral and will follow appropriate due process in all further engagements with the Competition Commission,” Msibi said.
