According to a Reuters report, the Competition Commission of India has concluded that three major Indian cement companies — Dalmia Cement, Shree Digvijay, and India Cements — have been engaged in anti-competitive practices for 12 years.
Financialexpress.com could not verify the news independently.
The report added that these Indian players made attempts to rig the bidding process, fixed prices, coordinated supplies, and tried to block foreign competitors from securing domestic contracts. As per the report, ONGC received bids for exactly Rs 7,000 per tonne in 2018 for a tender, for which the company launched an anti-trust case against the Indian firms.
Indian cement majors target ONGC
The Reuters report added that ONGC had then launched an investigation which revealed a decade of price collusion by these Indian players against the PSU, the report added. The company had filed the case in 2020 as it received bids coming in a similar pattern for four tenders of oil well cement.
With the continuous similar pricing bids, ONGC issued a warning in 2019, adding that the identical pricing bid was in violation of the competition law, the report added.
India Cements stated that its prices were submitted over the numerology factor of seven being a lucky number. “The financial bid was also supported by the numerology factor of 7,” the company letter stated.
Cartel period ran for 12 years
Reuters, citing a CCI report, added that Dalmia Bharat and Shree Digvijay ran the “cartel period” for twelve years, between 2007 to 2018, while India Cements was a part of the same from 2017–18.
The report pointed to discreet attempts made by domestic firms to exclude foreign competition from the market. These efforts were “substantiated from strong evidence in the form of communication, meetings, emails, admission,” Reuters added, citing the 90-page report.
The report noted that the firms Shree Digvijay and Dalmia were “actively involved” in the matter as they calculated the rail freight distance of their factories from ONGC cement delivery destinations, and then bid in a manner to avoid competition and also divided territories amongst themselves. As per the report, both the companies also made Excel sheets to compare distance and decide on volume sharing.
Dalmia Bharat declined to comment on the matter to Reuters, while India Cements, Shree Digvijay, and ONGC too have not responded to the news agency. Financial Express.com has not independently verified this report.
CCI has asked all the companies to respond to the report.