Tegeta Exploration & Resources had not done a due diligence audit on its R2.1-billion acquisition of Optimum Coal, it emerged this week at the Competition Tribunal hearing on the deal. This could be a sticking point for the authorities, who want assurances that jobs will not be shed as a result of the deal.The Competition Commission has recommended that the tribunal approve the transaction on condition there were no retrenchments as a result of the acquisition. This condition does not prevent Tegeta from retrenching workers because of operational factors such as a downturn in the coal industry or the nonrenewal of key supply contracts.Tegeta, owned by Oakbay Investments, and Mabengela Investments, will buy Optimum Coal from Glencore. Oakbay is controlled by the Gupta family, while Duduzane Zuma, a son of President Jacob Zuma, is Mabengela's single-largest shareholder.story_article_left1During this week's hearing, the commission tried to pin down Tegeta to a reasonable estimate of the number of "operational" retrenchments. The commission said that in the absence of any figure from Tegeta, it would be forced to analyse every single retrenchment to determine if it had been operational or deal-related.Tegeta's lawyers said the firm could not commit to a figure because a due diligence audit had not been done. It emerged that on Wednesday, Tegeta was just nine days into a due diligence exercise. The lawyers said the company was being held hostage by the commission.A due diligence exercise - an audit of a potential investment - is not a legal requirement, but one competition analyst said it was unusual for a transaction to reach this stage without one being completed. However, being bought out of business rescue did change matters, he said. "Being in business rescue means there's time pressure and it may be that Glencore [the seller] has provided sufficient warranties to Tegeta."As it became apparent that there was little agreement between the commission and the merging parties on the implications of the restriction on retrenchments, the tribunal requested them to redraft a retrenchment condition that all parties could accept and submit it to the tribunal on Friday.The tribunal is expected to make an order on whether the deal will be approved early this week...