CCI slaps record Rs 6,300 cr penalty on cement majors
The Competition Commission of India (CCI) today slapped a penalty of over Rs 6,300 crore on 10 cement companies, including ACC, Ambuja Cements, UltraTech Cement and JK Cement, for indulging in “cartelisation” and “anti-competitive” agreements. This is the largest-ever penalty ordered by the increasingly assertive regulator.
The competition watchdog also penalised the industry body — Cement Manufacturers Association (CMA) — for providing a platform to these companies for engaging in cartelisation.
“The commission decides to impose a penalty of 0.5 times of net profit for 2009-10 and 2010-11 in case of each cement manufacturer....The opposite parties (cement manufacturers) should cease and desist from indulging in any activity relating to agreement, understanding or arrangement on prices, production and supply of cement in the market,” the order of the commission said. The companies in total will have to cough up Rs 6,306.59 crore in form of penalty.
The CCI also instructed CMA to “disengage and disassociate itself from collecting wholesale and retail prices through the member cement companies and also from circulating the details on production and dispatches of cement companies to its members”.
The other companies found guilty are Grasim Cements (merged with UltraTech Cement), Lafarge India, India Cements, Madras Cements, Century Cements, Binani Cement and Jaiprakash Associates. The companies have been asked to deposit the penalty within 90 days.
The CCI in its order said that the cement manufactures were instrumental in limiting and controlling supplies in the markets and determining prices through an anti-competitive agreements. The case was probed by
