New Delhi: The Competition Commission of India (CCI) on Wednesday confirmed penalties of about Rs.6,700 crore on 11 cement firms and one Cement Manufacturers Association (CMA) for cartelization.
CCI asked cement companies to “cease and desist” from activities related to “agreement, understanding or arrangement on prices, production and supply of cement in the market”.
The commission also restrained CMA from collecting wholesale and retail prices, details of production and dispatch from its member firms.
CCI said this was a fit case for imposing penalties under the law because the activities of the cement firms caused huge losses to consumers even as the firms profited by acting in concert.
“We haven’t seen the order yet. We need to see that before commenting,” said an India Cements Ltd spokesperson.
Penalties of Rs.1,147.59 crore (ACC Ltd), Rs.1,163.91 crore (Ambuja Cements Ltd), Rs.167.32 crore (Binani Cement Ltd), Rs.274.02 crore (Century Cement), Shree Cements (Rs.397 crore), Rs.187.48 crore (India Cements Ltd), Rs.128.54 crore (JK Cements Ltd), Rs.490.01 crore (Lafarge), Rs.258.63 crore (Ramco), Rs.1,175.49 crore (UltraTech) and Rs.1,323.60 crore (Jaiprakash Associates Ltd) were imposed by CCI. In addition, a penalty of Rs.0.73 crore was imposed on CMA.
“It’s a very expected decision. It’s an old case that was appealed in the Competition Appellate Tribunal (Compat), which remanded the case to CCI. So it is a foregone conclusion CCI would not rule differently. In this case, because of the three kinds of parallel behaviour—on pricing, production and dispatch—the evidence was relatively easy to prove. CCI found it sufficient to find cartelization and it’s as per law. Of course, this case will again go for appeal in Compat,” said Rahul Singh, head of the competition practice at Trilegal, a law firm.
Sanjeev Kumar Singh, cement analyst with Emkay Global Financial Services Ltd, said: “This will be a long drawn litigation. There won’t be any immediate impact on stock prices.”
Ravi Krishnan contributed to this story.