New Delhi: With the issue of an increase in cement prices coming to the attention of the Monopolies and Restrictive Trade Practices Commission (MRTPC), cement manufacturers have submitted that they had not cut production with a view to hiking prices.
More importantly, they said, there was no cartelization—the main allegation made out by complainant Naresh Grover.
Grover claimed that the manufacturers had suspended production from 5 July 2000 to 9 July 2000 and deliveries had been resumed at Rs107-109 a bag against the earlier Rs85.
At present, MRTPC is cross-examining 13 top cement producers and the industry body, Cement Manufacturers Association (CMA), for alleged cartelization.
In January 2007, MRTPC member D.C. Gupta had presided over the cross-examination of Santosh Kumar Dalmia, joint secretary of CMA, Kamlesh Sharma, vice-president of Gujarat Ambuja Cement, and Ashok Jain, senior vice-president of Jaypee Cement.
Senior advocate O.P. Dua, appearing for the complainants, who had alleged that the CMA had arbitrarily directed producers to hike the cement prices, cross-examined producers in January.
In his deposition before MRTPC, Sharma said cement manufacturers had their own system to fix the price. He also denied that CMA controlled the price and production.
On 17 November 2006, MRTPC had directed that all manufacturers should be cross-examined. For the rest, it would start the process again in April.
The companies named were ACC, Gujarat Ambuja, Parisim Cement, L&T, Lafarge Cement, Grasim Cement, Satna Cement, Jaypee, Diamond Cement and Maihar Cement.
According to the complainant, CMA had conducted a meeting in Jabalpur on 5 July 2000 and decided to raise the price artificially by suspending production and dispatch from their plants. Besides the suspension, the complainant alleged, manufacturers closed their factories or units for seven days—from 27 November 2000 to 4 December 2000—and then again from 12 January 2001 to 19 January 2001. This resulted in supplies of cement going down, thus tampering with the demand and supply equilibrium necessary for determination of price, the complainant said. The move had pushed up the price to Rs150 per bag.