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Innscor Fined US$9.1 Million For Violating CTC's Competition Regulations

Innscor Fined US$9.1 Million For Violating CTC's Competition Regulations

The Competition and Tariff Commission (CTC) imposed a fine of US$9.1 million on Innscor Africa Limited (Innscor) for implementing the merger of one of its subsidiaries without the Commission’s approval.

Business Weekly reports that Innscor was also ordered to divest from the merger “forthwith”.

In its Newsletter for the first quarter of 2022, the CTC revealed that Innscor implemented the merger of one of its subsidiary – Ashram Investments, and Progroup Holdings’ subsidiary Amiata Investments without the Commission’s approval. This was in violation of the notification provisions of the Act.

What transpired:

1). It is alleged that in December 2019, CTC received a post-merger notification of the transaction involving subsidiaries of Progroup Holdings (Amiata Investments) and Innscor Africa Limited (Ashram Investments).

2). The transaction was implemented in June 2016 when Progroup Holdings underwent a Scheme of Reconstruction which resulted in Ashram Investments injecting USD$2.38 million into Progroup’s subsidiaries – Probrands and Probottlers.

3). Post the Restructure, in January 2018, Probrands disposed of its dairy assets to a newly incorporated company – Prodairy, which is a dairy and dairy products processor.

4). since incorporation, Prodairy’s shareholders are Innscor and Rowcost Investments holding 50.1 per cent and 49.9 per cent respectively.

CTC Analysis:

i). The CTC analysis revealed that the merger created a single firm with anti-competitive effects as well as substantial market power with long-lasting consequences on consumers. 

ii). CTC recommended that the Commission prohibits the Ashram/Amiata merger and orders Ashram to divest from Amiata forthwith.

iv). It was recommended that the CTC “imposes a penalty of USD$9,143,597.86 or its equivalence in ZWD at the time of settlement on IAL for consummating the merger without the Commission’s approval”.

The merger was analysed in light of the theories of harm associated with horizontal mergers namely unilateral effects.

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Ndini Ndadaro 1 month ago

Chamisa and his thugs at it again 😔

sgwe 1 month ago

uri murwere zvako.

VYBZ KARTEL 1 month ago

How come a company that employs most sought after Chartered Accountants (CAs), from the board to management staff, is in trouble with the authorities for not following regulatory requirements on mergers and acquisitions in terms of the Companies Act (now Companies & Other Business Entities Act). Heads will definitely roll.

Donald Trump 1 month ago

Inscor has a propensity for such anti competitive machinations.About a decade ago it acquired National foods the biggest flower miller without the approval of the CTC and were also fined for that but were not ordered to demerge.Remember inscor is the biggest bread manufacturer so they wanted to control the supply of flour.Inscor also acquired Irvines Chickens.

Pala 1 month ago

Because CA's are overated...

Mafirakureva 1 month ago

Because Zimbabwe is the most regulated country in the entire world.
Makes criminals of otherwise law abiding citizens

totito 1 month ago

Innscor haisi ya Ray Kaukonde, uya wekunzi "Kaukonde simuka, huya pano, Stop it", namayi Doctor(fake)

▫️ 1 month ago

The fire tender deal between the gvt and the local authorities has brought to my attention some hidden secrets. Belarus is a very close ally to Russia did you know. Our purchase of these equipment is not mainly centered on the case that Zanu wants to loot just to fatten itself, but they want to finance Russo-Ukraine war in favour of Russia which is likely to suffocate financially due to economic sanctions dzairi kupiwa.

They want to fund a war in a more diplomatic way, sekutengera Belarus iko kuri kuendesa Mari yekutsigira Hondo....

If you need to know a lot ask ...

🚒🚒🚒🚒🚒 1 month ago

The deal will still go on despite us not wanting it.

Pablo 1 month ago

Whatever the case maybe, we the citizens have already thumbs down to the deal.


Imwe Mbeu 1 month ago

Yah, the guys knew what they're doing 🙌🏾

Asalif 1 month ago

Tagwirei is doing the same but is not being confronted over the issue some companies arikutambisa friends and relatives front

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