The commission said its investigation revealed that WesBank and TFS 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.
It added that FirstRand, through its WesBank division, and TFS are involved in the provision of vehicle finance services and are therefore supposed to compete.
However, the commission said the two companies concluded a shareholder agreement, which contains clauses that prevent them from competing.
It said FirstRand, TSA Investment Holdings Limited and Toyota Motor Finance (UK) PLC each has a 33.3% share in TFS.
The commission alleged that these three companies concluded a shareholder agreement that includes clauses that prohibit WesBank from offering vehicle finance to customers seeking to purchase vehicles at authorised Toyota dealerships.
“Furthermore, the agreement identifies the vehicle that WesBank is prohibited from financing, and these are the ‘new’ Toyota, Lexus and Hino vehicles and any ‘used’ vehicles sold through any authorised Toyota dealership, except McCarthy Group.
“This arrangement constitutes market division by allocating customers or suppliers in contravention of section 4(1)(b)(ii) of the Act,” it said.
The commission added that this type of collusive conduct is harmful to consumers as it deprives them of the benefits that arise from competition.
“Such agreements are inherently inimical to competition, and the commission has asked the tribunal to fine the companies 10% of their turnover,” it said.
Toyota South Africa Motors (TSAM) declined to comment.
Ghana Msibi, the CEO of WesBank Motor, said the commission has called into question the restraint clause but WesBank still believes that the joint venture is legitimate and there is no market division in any shape or form.
Msibi said WesBank is still studying the information the commission based its decision on to refer the matter to the tribunal to get a better understanding of the exact basis of the commission’s concerns.