Apollo Tyres fined Rs30 cr in S Africa on cartelisation charge

Apollo Tyres has been been asked to cough up 45 million rands (about Rs 30 crore) as penalty for indulging in cartelisation in South Africa, a dispute which the company said relates to period when the firm was managed by Dunlop.

South African Competition Commission said Apollo Tyres (formerly Dunlop) has admitted that it took part in the tyre manufacturers' cartel and agreed on pricing and price hikes.

"Apollo Tyres has agreed to pay a penalty of R45 million which represents 4.75% of its 2008 total turnover and admits that it was involved in price fixing conduct," the Commission said in its order.

When asked about the allegations, Apollo Tyres said it has agreed to pay up the fine in the interest of shareholders although the period referred to by the Commission belonged to the erstwhile management.

"In the interest of business and its various stakeholders, Apollo Tyres South Africa Pty Ltd (previously Dunlop Tyres International Pty Ltd), has amicably settled allegations of cartelisation by the South African Competition Commission."

"During the period referred to by the Competition Commission, the company was led by the previous management, and a management change took place post the acquisition by Apollo Tyres. The current management had no involvement in, or knowledge of, the anti-competitive conduct identified by the Commission. The company has decided to settle this and move forward in the best interest of all stakeholders," a spokesperson of Apollo Tyres said.

The agreement followed the South African Commission's investigation against South African Tyre Manufacturers Conference (Pty) Ltd (SATMC) and four local tyre manufacturers and suppliers -- Apollo, Goodyear South Africa (Pty) Ltd, Continental Tyre South Africa (Pty) Ltd and Bridgestone South Africa (Pty) Ltd ("Bridgestone").

The Commission had initiated this case following a complaint lodged by a fleet owner, alleging that the local tyre manufacturers simultaneously adjusted their prices around the same time and within the same parameters.

A search and seizure operation was carried out on the premises of Bridgestone, Apollo and SATMC, it said.

The Commission's investigation revealed that the cartel operated during the period of 1999-2007.

"The tyre manufacturers agreed on price increases, timing of price increases and implementation thereof," it added.

It further found that the SATMC was used as a platform to conduct these discussions.