With the year drawing to a close, Moody’s decision to leave our credit rating unchanged at Ba2 with a stable outlook is a much needed splash of cold water. It tempers the flames of enthusiasm that South Africa is finally turning a corner. Yes, we’ve chalked up wins — a third primary budget surplus, exit from the Financial Action Task Force greylist and even a lid on load-shedding. But the rule of law continues to bleed out in slow motion.
Brazen assassinations of whistleblowers dominate the headlines. But the quieter, technocratic corrosion is just as damaging. The competition authorities are increasingly a binding constraint on growth.
No financial journalist wants to write about regulators. We’d far rather cover dynamic mergers & acquisitions, capital allocation and strategic dealmaking. Yet increasingly the story becomes the regulator itself, making overreach a core deliverable.
If you want to understand why the Competition Commission has become a binding constraint on growth, you need only look at its handling of the Curro–Mouton Foundation transaction, a deal so obviously pro-public interest that its interrogation should have lasted all of 15 minutes.
The structure is straightforward: a philanthropic foundation proposes to acquire Curro, convert it into a nonprofit vehicle and shift the business toward a low- or even zero-fee model. At a time when the state’s education system is collapsing under its own inefficiency, this is a rare attempt to tackle the country’s single greatest long-term binding constraint: human capital.
And because the foundation isn’t already an operator in the schools market, there is no concentration increase and no plausible competition harm in a private education sector already characterised by choice, fragmentation and low barriers to entry. On core competition grounds, the deal is as clean as they come.
Yet the commission’s antennas quivered. Instead of clearing the runway for a transaction that expands access to quality schooling for poor children, which is arguably the most direct public-interest benefit one could design, the regulator retreated into familiar script of abstract anxieties about “public interest”, vague ideological discomfort with private actors stepping into state failure and a lingering suspicion that anything resembling “privatisation” must be interrogated, prodded and encumbered.
The irony, of course, is that the private sector is already propping up functions the state has abandoned, from electricity generation and municipal maintenance to security, healthcare and, increasingly, education. That is the political reality. Competition law cannot undo it, no matter how much it disapproves.
The deal has now been approved, but with conditions, of course. Conditions we cannot even see, because the commission’s recommendation omits them entirely and the parties appear to have claimed confidentiality. In a public-interest case. You can’t make it up. When conditions are imposed on a transaction that already improves public interest outcomes, you have to ask what exactly the regulator is trying to “fix”.
As if on cue, no sooner had I filed a draft of this column than the commission released “Draft Guidelines on Minority Shareholder Protections”, the most sweeping expansion of the definition of “control” in two decades, just before we all rush off on our annual holidays.
Buried in Annexure B, ordinary investor protections such as veto rights over strategy, budgets or senior management appointments are now deemed control-conferring. Even a small minority investor with no majority stake, no operational role and no dominance in votes could be treated as acquiring “control” and forced into merger notification.
This collapses the global distinction between investment protection and strategic influence. In venture capital, private equity, project finance, infrastructure partnerships and even BEE deals, such rights are standard guardrails. Here, they will now drag an entire universe of capital transactions into merger regulation.
The commission is in effect telling minority investors: “If you want any meaningful protection for your investment, expect us in the room.” This will slow capital formation, raise deal uncertainty and inject a new layer of discretion into transactions that pose no competitive harm. As the government of national unity (GNU) tries to pull private investment into energy, logistics and social infrastructure, the commission is writing policy that makes investment slower, costlier and riskier.
This makes South Africa one of the most expansive minority-control jurisdictions in the world, more aggressive even than the EU Consolidated Jurisdictional Notice on which our Competition Commission claims to rely.
Any private equity deal, joint venture, minority investment, mezzanine structure or shareholder agreement with standard investor protections could suddenly become a notifiable merger.
But it’s not only the commission that is failing us. The Competition Tribunal is also suffering under the weight of what appears to be draconian leadership under chair Mondo Mazwai. A wandering albatross from inside the system tells me “[t]he situation at the Competition Tribunal is terrible, unsustainable and intolerable. The tribunal’s CFO recently resigned because of the toxicity that has overcome the environment.”
I’ve seen two formal National Education, Health and Allied Workers’ Union (Nehawu) letters, one dated June 10 2025, addressed to the chair of the tribunal, detailing persistent workplace bullying, harassment, intimidation, gaslighting, verbal abuse, belittling conduct, implicit threats, humiliation of staff and psychologically harmful behaviour.
The letter describes employees crying “almost daily” and seeking mental health treatment due to the poisonous environment.
The second letter, dated September 12 2025 and addressed to trade, industry & competition minister Parks Tau, expands the picture dramatically. It speaks of an exodus of employees, including senior executives and tribunal members. Four COOs in five years, each leaving under pressure. Nearly 20 resignations among case managers in the same period.
Repeated allegations of bullying, intimidation, humiliation, shouting, threats and retaliation. Employees escorted out of the building “like criminals” and widespread anxiety, stress, panic attacks and depression. A climate of fear so pervasive that staff will not report abuse.
Investors and Moody’s are not blind to this. They see it before they see any “new dawn”. The GNU needs to build on the good work done so far and make 2026 (the Chinese year of the fire horse) the year we start putting the growth horse ahead of the regulatory cart.
• Avery, a financial journalist and broadcaster, produces BDTV’s ‘Business Watch’. Contact him at michael@fmr.co.za.
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