June 14 (Bloomberg) -- South Africa’s Economic Development Ministry’s “aggressive intervention” in Wal-Mart Stores Inc.’s bid to buy a stake in Massmart Holdings Ltd., taking the South African retailer by surprise, Chief Executive Officer Grant Pattison said.
“It was not handled as well as it could have been,” Pattison said, according to a transcript of an interview published in Johannesburg’s Business Report newspaper today.
South Africa’s Trade, Economic Development and Agriculture Ministries made a joint bid to the Competition Tribunal to force the world’s largest retailer to restrict imports if it buys a controlling stake in Johannesburg-based Massmart, concerned about job losses.
That action failed, with the competition authority on June 1 allowing Bentonville, Arkansas-based Wal-Mart to proceed with its 16.5 billion rand ($2.4 billion) purchase on condition no jobs are cut for two years.
President Jacob Zuma’s ruling African National Congress holds a political alliance with the Congress of South African Trade Unions, the country’s biggest labor federation with about 2 million members.
Zuma appointed Ebrahim Patel, who was head of the country’s main clothing and textile union, as economic development Minister in 2009. Patel wrote South Africa’s economic plan, adopted by the government last year, that pledges to create 5 million jobs by 2020.
Cabinet ministers in South Africa are driven by varying political ideologies, making them act independently, Pattison said
“We are in the politics of appeasement,” Pattison said. “We have the alliance and the complexities of how it remains together and this dominates our political landscape. As far as I can tell we have ministers of such varying political views that they tend to act completely independently. The minister in charge of a particular department is really acting according to his own ideology.”
--Editors: Antony Sguazzin, Karl Maier
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