On August 13, 2019, the State Administration for Market Regulation ("SAMR") commenced an investigation into Dutch OYAK TCC Holdings B.V. ("Joint Venture"), a joint venture between Taiwan Cement Corporation ("Taiwan Cement") and Ordu Yardimlasma Kurumu ("OYAK") for failing to declare the concentration of business operators.
During the investigation, the SAMR found that on October 25, 2018, Taiwan Cement and OYAK signed a share subscription agreement, shareholders' agreement and articles of association in relation to the Joint Venture; the shareholding of which comprised: (a) an investment by OYAK via its existing cement business and assets in Turkey to acquire 60% of the shares; and (b) a cash contribution by Taiwan Cement to acquire the remaining 40% of the shares. On November 26, 2018, Taiwan Cement and OYAK completed the business of registration of the Joint Venture.
The SAMR found that the Joint Venture was a concentration of business operators for the purposes of Article 20 of the Anti-Monopoly Law, and that the turnover of both Taiwan Cement and Oyakin in 2017 reached the declaration standard stipulated by Article 3 of Provisions of the State Council on the Declaration Standard of Business Operators Concentration. For these reasons, Taiwan Cement and OYAK were required to file the above mentioned declaration before completing the business registration of the Joint Venture. However, the parties failed to do so, in violation of Article 21 of the Anti-Monopoly Law. Despite this failure by the parties to file the required declaration, the SAMR found that it did not have the effect of eliminating and restricting competition in the market after conducting its competition assessment.
Based on its investigation and the outcomes of its evaluations, the SAMR decided to impose an administrative penalty of RMB 300,000.00 on Taiwan Cement and OYAK respectively on the basis of Article 48 and Article 49 of Anti-Monopoly Law and Article 13 of Interim Measures for Investigating and Handling Failure to Legally Declare the Concentration of Business Operators.
This update was provided by our partner Allbright Law Offices China.