JK Tyre, other companies face antitrust scrutiny in bid-rigging case

CCI last year ordered a probe after the northern state of Haryana said JK Tyre employed unfair trade practices while bidding to supply tyres for public transport vehicles

The Competition Commission of India (CCI) is investigating JK Tyre & Industries after a state accused the company of bid rigging, and the probe has been expanded to other firms, according to sources and legal filings seen by Reuters.
 
The CCI last year ordered a probe after Haryana said JK Tyre employed unfair trade practices while bidding to supply tyres for public transport vehicles, a court filing showed. The case details and CCI’s initial assessment were contained in a September 19 state court filing made by JK Tyre contesting some of the watchdog's demands.
 
The filing, reviewed by Reuters, has not previously been reported and the CCI does not disclose current probes into cartel cases.
 
According to documents in the filing, Haryana told the CCI that JK Tyre was the sole bidder in a tender and quoted high prices. The CCI in November ordered a probe saying "non-participation by other tyre firms” was suggestive of a “concerted act to rig the bid”.
 
A JK Tyre spokesman declined to comment “as the matter is subjudice”.
 
In August, the CCI decided the role of other firms should be examined and expanded its scrutiny to include Apollo Tyres, CEAT, MRF, and the Indian units of France’s Michelin and Germany’s Continental, sources familiar with the case said.
 
It was not immediately clear whether the CCI has approached those firms.
 
The sources declined to be identified as details of the probe were confidential. The CCI and the Haryana did not respond to requests for comments. MRF, Michelin, and Continental also did not respond to requests for comments, while CEAT and Apollo declined to comment.
 
A finding of bid-rigging could lead to a potential fine of up to three times the profit in each year prices were fixed by the companies, or 10 per cent of annual revenue, whichever is higher.
 
JK Tyre says it accounts for 30-36 per cent of the market for different types of tyre variants that is worth some $9 billion annually.
 
Haryana has alleged JK Tyre was the sole bidder in the tender in 2018 and its prices were around 34 per cent higher than previous purchase rates, the documents show.
 
As part of the probe, the CCI this year sought “email dumps" over five years belonging to some senior executives in the JK group, saying they were essential for the investigation.
 
JK Tyre has challenged that demand at the High Court of Punjab and Haryana, saying it was cooperating with the investigation and the emails of those executives had limited or no relation to the case.