State-owned Coal India Ltd (CIL), country?s largest coal producer, is under scrutiny from the competition regulator. The Competition Commission of India (CCI) has initiated a thorough investigation against the coal producer following a complaint from the Explosives Manufacturers Association of India (EMAI) alleging bid rigging.
According to CCI sources, the charge is that CIL sourced up to one-fourth or 25% of its explosives from one state-owned explosives manufacturer without inviting any bids. In a meeting held last month, which was chaired by the commission?s chairman Dhanendra Kumar, the CCI ?prima-facie found enough evidence of anti-competition and referred the case to it its director general office for investigation.?
?There are state-owned players who blatantly flout competition laws. We are getting to the bottom of this. Hopefully investigation report will be prepared soon,? a senior CCI official told FE. He added, that there are numerous such instances when reputed domain players knowingly or unknowingly indulge in anti-competitive practices.
Another CCI official said that DG report on the matter would be completed by month-end.
In this case, he said, that sections 3 and 4 of the Competition Act have been compromised. These deal with collusion between players and abuse of dominance. Indian Oil and Indian Explosives contribute almost 50% of mining explosives to CIL, he said.
Despite repeated attempts CIL officials could not be contacted for comments. This is not the first time that a state-owned enterprise has been pulled up by the competition regulator. In November 2009, CCI initiated a probe against the country?s largest steel producer Steel Authority of India (SAIL) for allegedly entering into an anti-competitive agreement with the Indian Railways for the supply of rail steel. The investigations were, however, abruptly halted due to a stay order imposed by the commission?s appellate body?Competition Appellate Tribunal.
Since its notification in May 2009, the commission has initiated probe against several high-powered cases, however, is yet to pass its final verdict on any one of them.