Steel cos under CCI scanner, watchdog to read riot act

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New Delhi, Apr 24 With steel prices failing to cool down, the Competition Commission of India (CCI) has put the sector under scanner. The competition watchdog has called a meeting of steel industry associations and major players later this month to discuss their cartel-like tendencies.

Sources close to the development said the Indian Steel Alliance, Tata Steel, Essar, Steel Authority of India Ltd, JSW Steel are among those who have been called for the meeting. Along with them, The Cold Rolled Steel Manufacturers Association, Sponge Iron Manufacturers Association, the Indian Stainless Steel Development Association as well as alloy steel producers have been summoned by the watchdog.

Acting chairman of CCI Vinod Dhall is expected to stress on the need for market friendly policies by the steel Companies. It is also likely to warn them against cartelisation actions such as market sharing policies, bid rigging and pricing strategies, all of which can lead to hefty fines and penalties. Imprisonment provisions under the competition law will also be pointed out to the industry players.

CCI’s latest round of meetings comes after steel Companies raised prices by over 50% in the past year and have been responsible to a large extent for fueling inflation, which has breached 7%. On Tuesday, Prime Minister Manmohan Singh asked steel Companies to lower prices and finance minister P Chidambaram had warned them against behaving like a cartel. The Monopolies and Restrictive Trade Practices Commission too is inquiring allegations of cartelisation against manufacturers of steel and cement.