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Bank Windhoek Mum On Competition Commission Investigation

By: Nghiinomenwa Erastus

Bank Windhoek has indicated that they will not comment on the legality of their exclusive arrangement with Dr Weder, Kauta & Hoveka Inc in terms of competition laws until the investigation is completed.

The agreement allegedly entails lessening competition and has features of abuse of their dominant position according to the provisions of the Competition Act in Section23 and 26.

Bank Windhoek’s executive officer of marketing and corporate communication services, Jacquiline Pack, told The Villager Business Desk yesterday that the bank acknowledged the notice of the investigation by the Namibian Competition Commission (NaCC), but they will not comment for now till the investigation is complete.

“We accordingly reserve our comments until this process has been concluded and finalised in line with all applicable legal and administrative law principles,” she said.

The Namibian Competition Commission (NaCC) resolves to investigate alleged exclusive dealings in property conveyance services between Bank Windhoek and Dr Weder, Kauta & Hoveka Inc.

The Act of property conveyance is the transfer process of property rights or interest which is done by legal practitioners on behalf of clients when buying houses/property.

Not all lawyers do it, and one needs to pass a conveyancing exam to facilitate it.

The agreement between the bank and the group of lawyers indicates that all those transferring or selling properties under Bank Windhoek only have to use conveyance from Dr Weder, Kauta & Hoveka Inc.

“It is alleged that this agreement requires Bank Windhoek property financing applicants to only make use of Dr Weder, Kauta & Hoveka Inc’s conveyancing services to the exclusion of other conveyancing service providers in the relevant market,” the Commission wrote.

However, according to the Commission, this practice is said to lessen and limit competition and shut out other independent service providers in the relevant market, which can provide conveyancing services to Bank Windhoek financed property transactions.

The alleged conduct of law firm Dr Weder, Kauta & Hoveka Inc amounts to a possible contravention to the various provision of section 23 of the Competition Act.

Section 23 restricts agreements between undertakings, decisions by associations of undertakings or concerted practices by undertakings which have, as their object or effect, the prevention or substantial lessening of competition in trade in any goods or services in Namibia.

Such agreements are prohibited unless they are exempt in accordance with the provisions of the Act.

The law firm, according to the Commission, could be in contravention of Section 23 (1) read with Section 23 (2) (b), and Sections 23 (3) (e) and 23 (3) (g).

Section 23(3)(e) prohibits agreement between parties that limits or controls production, market outlets or access, technical development or investment.

Section 3(g) prohibits agreements and undertakings that conclude contracts subject to acceptance by other parties of supplementary conditions that by their nature or according to commercial usage have no connection with the subject of the contracts.

As for Bank Windhoek, their alleged conduct is contravening the same provision of Section 23 as well as section 26 (1) read with section 26 (2) (a), 26 (2) (b) and 26 (2) (d) of the Competition Act.

Section 26 deals with the abuse of the dominant position. It categorises the type of conduct on the part of one or more undertakings that amounts to the abuse of a dominant role in a market in Namibia.

Provision 2(b) of Section 26 highlighted that any undertaking that limits or restricts production, market outlets or market access, investment, technical development or technological progress can be viewed as an abuse of dominant position.

Section 26 (2)(d) says the conclusion of contracts subject to acceptance by other parties of supplementary conditions, which by their nature or according to commercial usage have no connection with the subject matter of the contracts, is viewed as an abuse of dominant position.

According to Pack, Bank Windhoek “subscribes to good corporate governance principles and standards and is lending its full support and cooperation to the Commission during this ongoing process”.

She explained that it is accepted that a public regulatory institution may publish notices of investigations conducted in terms of the Namibian Competition Act, considering the public interest in such matters.

Pack, however, added that Bank Windhoek “respectfully” draws attention to the fact that it is an ongoing regulatory inquiry in terms of which submissions to the investigation still require to be heard, considered, and assessed by the Commission in order to make a final determination.

The Commission is tasked to implement measures to increase market transparency, be responsible for investigating contraventions of the Competition Act by undertakings, and control mergers between undertakings.

The Commission can do the investigation on its own initiative or at the request of the minister of trade.

Furthermore, to consult with the minister of industry and trade on any matter which is of great economic or public interest. Email: erastus@thevillager.com.na

Julia Heita

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