In a statement, the ICCC advised that even though MFCL and NBPOL announced that the acquisition was completed on 23rd August, 2018, both parties never obtained a clearance or an authorisation from them.
ICCC Commissioner and CEO, Paulus Ain, said it is important for businesses to apply for clearance or authorisation from the ICCC to safeguard the concerned parties from potential legal action from the ICCC or any aggrieved third parties under the ICCC Act.
“The ICCC administered a voluntary merger notification regime under the ICCC Act where businesses were not required to apply for clearance or authorisation for any proposed merger or acquisition. However, on 25th July, 2018, the ICCC Act was amended by Parliament, making it mandatory for parties to a merger or an acquisition to give notice seeking a clearance from the ICCC if the merger or acquisition fell within certain thresholds.”
According to Ain, the transaction value of the recent acquisition of K174 million was well within the thresholds for giving a notice seeking clearance from the ICCC, which was K50 million.
Ain, however, explained that the acquisition is not subject to the new thresholds because the new amended ICCC Act is yet to be certified by the Speaker’s Office.
Despite this, he said businesses should still apply for a clearance or authorisation under the ICCC Act.
“This is because in the event that the new amended ICCC Act is certified and gazetted, the amended ICCC Act may be made retrospective and come into effect on the date that it was passed by Parliament, which is 25th July 2018.
“Failure to give notice seeking clearance from the ICCC is an automatic fine of K750,000. Therefore, to safeguard businesses from this potential effect, they should apply for a clearance or authorisation if the proposed acquisition would be completed after 25th July 2018.”
Ain further stated that the ICCC reserves its rights under the ICCC Act to investigate any consummated acquisitions and take legal action if it is satisfied that the acquisition would have the effect of substantially lessening competition in a market in PNG.