NTC - Network Healthcare Holdings Limited - Press Release

NTC - Network Healthcare Holdings Limited - Press Release                       
Network Healthcare Holdings Limited                                             
Registration number 1996/008242/06                                              
Incorporated in the Republic of South Africa                                    
JSE share code: NTC                                                             
ISIN code: ZAE000011953                                                         
("Netcare" or "the company")                                                    
Press Release                                                                   
The Tribunal today indicated that it would not approve the agreement between    
Netcare and the Competition Commission to resolve the issues relating to        
Netcare`s relationship with Community Healthcare Group Limited ("CHG").         
This agreement arose following the Commission suggesting that Netcare had prior 
implemented a merger by assuming control over CHG and that there had been a     
contravention of section 4(1)(b) of the Competition Act, because Netcare had    
represented CHG as an associated company in negotiations with medical schemes.  
Netcare and the Commission had agreed to settle the matter on the basis of the  
payment of a sum of R6 500 000.                                                 
Originally the majority of the CHG hospitals were owned by the Macmed Group     
("Macmed"). Macmed offered the hospitals to Dr A Mokgokong and Mr Joe           
Madungandaba and agreed to transfer its hospitals into a new entity, which would
be controlled by Dr Mokgokong and Mr Madungandaba. Dr Mokgokong and Mr          
Madungandaba subsequently incorporated the Malesela Hospital Group ("MHG"),     
which resulted in the hospitals which had previously been owned by Macmed being 
transferred into MHG.                                                           
In 1999, Macmed was liquidated. Shortly thereafter, the majority of the MHG     
subsidiaries were also liquidated in consequence of the Macmed liquidation.     
Following the liquidation of Macmed, Netcare agreed to provide financial        
assistance to Dr Mokgokong and Mr Madungandaba to acquire the hospitals out of  
liquidation on the basis that it was a black economic empowerment initiative.   
Netcare`s financial assistance was utilised to rescue the hospitals from        
liquidation and to establish CHG. Moreover, CHG required Netcare`s assistance in
relation to IT systems and infrastructure in order to function effectively.     
At the time that Netcare initially acquired the shareholding in CHG it was      
advised at that stage the acquisition of the shares in CHG did not constitute a 
notifiable merger.                                                              
Following the termination of the traditional collective negotiations between the
BHF, HASA and SAMA, small hospital groups like CHG were not able to negotiate   
tariffs independently. Accordingly, given the fact that CHG was reliant on      
Netcare for its IT systems and infrastructure, Netcare informed medical schemes 
that it would be negotiating tariffs on behalf of CHG. At the time Netcare      
engaged with medical schemes on CHG`s behalf, it was transparent about the fact 
that it was representing CHG in the negotiations on the basis of the fact that  
CHG was considered to be part of the broader Netcare Group and that Netcare had 
acquired a significant shareholding in CHG.                                     
Netcare`s conduct in this matter was motivated principally by a desire to assist
black economic empowerment and facilitate the transformation of the private     
healthcare sector.                                                              
As such, Netcare is disappointed with the decision of the Tribunal not to       
sanction the consent order. It is Netcare`s view that the proposed consent order
is a fair resolution of the historical events which ultimately led to the       
Competition Tribunal approving unconditionally Netcare`s acquisition of the     
entire issued share capital of CHG late last year. In coming to this decision,  
the Tribunal concluded that Netcare`s acquisition of control over CHG would not 
lead to a substantial prevention or lessening of competition in any relevant    
market.                                                                         
Netcare is currently studying the Tribunal`s decision with a view to engaging   
constructively with the Competition Authorities in order to reach a satisfactory
resolution of this issue.                                                       
11 March 2008                                                                   
Sponsor                                                                         
Merrill Lynch South Africa (Pty) Limited                                        
Date: 11/03/2008 07:30:45 Supplied by www.sharenet.co.za                     
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