The Competition Commission of India (CCI) is learnt to have found Muthoot Finance misrepresenting information in a complaint before it and indulging in forum shopping. The matter pertains to Muthoot Finance filing a complaint with the anti-trust regulator n 2021 against debenture trustees for allegedly exploiting its market dominance by imposing excessive fees to facilitate the issuance of non-convertible debenture (NCD).
When CCI investigated the matter, it found out that Muthoot has already registered a similar complaint with the markets regulator Securities and Exchange Board of India (SEBI) but failed to inform CCI on this parallel complaint. The CCI’s general regulations prescribe the format for filing complaints, and prohibits companies to file selective information in their complaints.
An email sent to Muthoot Group didn’t elicit any response.
A CCI source confirmed that the case is pending with the commission on this issue. However, he said that there’s still a lack of judicial clarity on which regulator is appropriate to take up the complaint in case of regulatory overlap. “But as a thumb rule, if there’s an overlap with the sectoral regulator, the CCI usually doesn’t interfere. But if a particular issue is not covered by any regulator, and there’s a violation of competition laws, the CCI pitches in,” the source said.
Competition law experts said that CCI typically comes down heavily on entities who deliberately refrain from supplying the complete information.
“Because of an amendment made in 2019, parties are mandated to disclose all ongoing disputes and parallel litigations in other courts or authorities. CCI has rarely invoked this provision but now it seems it takes such omission seriously, and has, in fact, increased the penalty on erring parties to Rs 1 crore from Rs 10 lakh earlier,” said M.M. Sharma, Head (Competition Law) at Vaish Associates.