CCI imposes Rs 207-cr penalty on 7 cement firms

Penalty is for violating competition norms with regard to a 2012 tender floated by a Haryana agency

The Competition Commission of India (CCI) has imposed penalties aggregating to almost Rs 207 crore on seven major cement companies for rigging of bids and cartelisation to get tenders in Haryana government orders.

Shree Cement, UltraTech Cement, Jaiprakash Associates, JK Cement, Ambuja Cements, ACC and JK Lakshmi Cement have been slapped with fines of Rs 18.44 crore, Rs 68.3 crore, Rs 38.02 crore, Rs 9.26 crore, Rs 29.84 crore, Rs 35.32 crore and Rs 6.55 crore, respectively. CCI imposed the penalty at 0.3 per cent of their average turnover for three financial years. 

This is for breach of competition norms on a tender floated by a Haryana state agency in 2012, for supply to government departments, boards and corporations.

The 120-page order states that the anti-competitive conduct was re-affirmed through SMSes exchanged and calls made among the companies' officials. The seven companies have been directed "to cease and desist" from such activities.

The order came on a complaint originally filed by the Director, Supplies and Disposals, of the state government. It was alleged that the cement makers formed a cartel and quoted higher bid prices for the tender. CCI had ordered a detailed probe in 2014.

The bid rigging was established from quoting of unusually higher rates in the impugned tender and determining different basic prices for supply of cement at the same destination, among others.

An UltraTech spokesperson said, "Our company is always in compliance with the laws. We will examine the CCI order and take appropriate actions." Spokespersons of ACC and Ambuja Cement had no comments. A call to JP Associates' spokesperson went unanswered. Shree Cements' chairman could not be reached. 

This is not the first time cement companies have come in the crosshairs of CCI. In August 2016, it had slapped a collective penalty of about Rs 6,700 crore on 11 companies in the sector. This was stayed on an appeal to the Competition Appellate Tribunal.