Competition Comm orders another probe against Coal India

In yet another action against Coal India Ltd, the Competition Commission has ordered fresh probe into the state-run miner and its subsidiary for alleged abuse of dominant market position in fuel supplies.

The probe would also look into the role of executives who were in-charge of business if violations of competition norms are found.

The move comes less than two months after Competition Commission of India slapped Rs 1,773 crore penalty on CIL for unfair business ways. CCI had ordered another investigation against the miner in December.

Holding that there is a "prima facie" case, the fair trade watchdog has directed the Director General - its investigation arm - to probe the matter. The investigation has been ordered against Western Coalfields Ltd and Coal India.

CCI said: "In case, DG finds that the Opposite Parties (OPs) have acted in contravention of the provisions of Act, it shall also investigate the role of the persons who at the time of such contravention were in-charge of and responsible for the conduct of the business of the company so as to fix responsibility of such persons under section 48 of the Act."

Those persons would also be given an opportunity to explain their stance.

The latest order, dated January 22 but released today, follows a complaint filed by Wardha Power Company, which operates a 540 MW plant at Warora, Maharashtra.

"The informant is aggrieved by the various clauses of the FSAs as well as acts and omissions of the OPs thereunder. It has alleged the abusive conduct of the OPs on the basis of legal, regulatory and the policy regime in the entire area of production and distribution of coal in India," CCI noted.

It is pertinent to mention that the Commission had ordered investigations against Coal India and its subsidiaries for their alleged anti-competitive conduct in similar cases earlier, CCI added.

Among others, Wardha Power Company has alleged that the Opposite Parties unilaterally inserted a provision in the Fuel Supply Agreements (FSAs) to the effect that it was to furnish additional bank guarantee of Rs 183.53 crore, equivalent to amount of entire investment of OPs in the subject mines.

As per the complaint, there was no justification for guarantee of entire investment.

Last month, Competition Commission had imposed a fine of Rs 1,773 crore on Coal India, the first major penalty on a state-owned company by it, for unfair business ways.

Coal India has challenged the order at the Competition Appellate Tribunal.