CCI penalises Grasim, ABCIL and Gujarat Alkalies for bid rigging Delhi Jal Board tender

The Competition Commission of India (CCI) has issued orders against three companies, including Grasim Industries Ltd, Adiya Bilrla Chemicals (India) Ltd and Gujarat Alkalies and Chemicals for bid-rigging Delhi Jal Board tenders for supply of poly aluminium chloride.

The CCI also imposed a combined penalty of Rs6.27 crore on the three companies. CCI has imposed penalties of Rs2.30 crore, Rs2.09 crore and Rs1.88 crore, respectively, upon GIL, ABCIL and GACL for anti-competitive conduct.

CCI has found Grasim Industries Limited (GIL), Aditya Birla Chemicals (India) Ltd (ABCIL) and Gujarat Alkalies and Chemicals Ltd. (GACL) to be in contravention of the provisions of Section 3(1) read with Section 3(3)(d) of the Competition Act, 2002 of rigging Delhi Jal Board tenders for procurement of poly aluminium chloride  (PAC), which is used for purification of water. 

The CCI today passed the final order on a reference filed by Delhi Jal Board (DJB).

While rejecting the plea of being single economic entity taken by GIL and ABCIL, CCI noted in the order that these two companies are not only separate legal entities but also have participated in these tenders individually and separately.

Further, CCI noted that the concept of single economic entity has no application in the context of the proceedings initiated under Section 3(3) of the Act, especially in a case of bid rigging/collusive bidding.

Apart from issuing a cease and desist order against the above companies, CCI has imposed penalties of Rs2.30 crore, Rs2.09 crore and Rs1.88 crore on GIL, ABCIL  and GACL, respectively, for the anti-competitive conduct. The penalty has been levied at the rate of 8 per cent of the average relevant turnover of GIL and ABCIL of preceding three years.

In case of GACL, penalty has been levied at 6 per cent of the average relevant turnover of preceding three years.

The commission note that the conduct of GIL and ABCIL was egregious as these companies while apparently submitting separate bids, prepared and finalised the same through common channels, creating a façade of competitive landscape.

Vide separate order passed in another reference filed by DJB in respect of alleged bid rigging in the tenders floated for liquid chlorine- another chemical used for purification of water - CCI found no contravention as no analysis was done by the Director-General with respect to basic price, transportation cost, taxes and policy of profit margin of the parties as was done in the previous reference.