A hostile takeover of mining company Gold Fields by rival Harmony would be to the detriment of black economic empowerment, the Competition Tribunal heard in Pretoria on Tuesday.
Jeremy Gauntlett, SC, for Gold Fields, said 28% of the company suppliers were BEE entities, compared with a figure of 9% for Harmony.
”Many of Gold Fields’ existing BEE suppliers would be forced out”, he said in his opening statement to the tribunal.
Gold Fields is asking the tribunal to overturn the Competition Commission’s ruling last November which effectively allowed Harmony to continue its hostile takeover bid.
Gauntlett argued that the takeover will result in thousands of job losses more than those foreseen by Harmony.
An undertaking by Harmony to cap retrenchments at 1 500 at the commission’s insistence was viable, given the cost saving it was intended to achieve.
Based on Gold Fields’s own calculations, Harmony will have to retrench between 4 200 and 7 100 people to meet its savings target.
Such a move, Gauntlett said, will have a severe knock-on effect on the dependants of retrenched workers. It was also argued that Harmony will not be able to operate its newly acquired Gold Fields operations with reduced manpower.
David Unterhalter, SC, for Harmony, said the point at issue was a very narrow one. The tribunal had merely to determine when the merger would be uncompetitive, and no such case had been made.
He rejected claims of large scale job losses and pointed out that most retrenchments would be at management level.
Should it turn out that Harmony was making a colossal error, Unterhalter added, all it would have to do was ”put back what it has taken out and pay the cost of doing so”.
These costs would not be felt anywhere other than the pockets of shareholders, Unterhalter said.
As to claims of damaging BEE, he disputed Gold Fields’ calculations, saying they ”do not reflect particularly well on the interests of empowerment”. – Sapa