Competition tribunal stays CCI penalty on India Cements

The Competition Appellate Tribunal (Compact) has issued a stay on the Competition Commission of India (CCI) order imposing a Rs187.48-crore penalty on India Cements over unfair pricing and alleged cartelisation.

India Cements Ltd on Monday said it has obtained a stay order from Compact after it appealed the CCI's decision to impose a fine of Rs187.48 crore on it for unfair pricing practices.

The CCI had imposed penalties on 10 cement companies, including India Cements and their trade association, the Cement Manufacturers Association (CMA), for alleged cartelisation.

CCI had noted that the cement companies were using the industry association as a platform for sharing pricing information and capacity utilisation so as to keep hold on prices and the market through capacity utilisation, production and dispatch, to restrict production and supplies in the market.

CCI also found that the cement companies have been acting in concert in fixing prices of cement.

By its 31 August order, CCI imposed penalties of about Rs6,700 crore on 10 cement companies, including India Cement and umbrella association of cement industry in India - Cement Manufacturers Association (CMA) - for cartelisation of trade.

India Cements was fined Rs187.48 crore, ACC Rs1,147.59 crore, ACL Rs1,163.91 crore, Binani Rs167.32 crore, Century Rs274 crore, JK Cements Rs128.54 crore, Lafarge Rs490 crore and Ramco Rs258.63 crore among others

While granting a stay on the CCI order against the company, the Appellate Tribunal, however, asked India Cements to deposit 10 per cent of the penalty with the registry of the tribunal.

In a filing with the National Stock Exchange (NSE), India Cements said it would deposit the said money as it saw a fair chance of success in its appeal.

"There are chances of success in our appeal," the company said.

CCI's order came after a complaint was filed by the Builders Association of India against the cement companies and the CMA. The cement companies and the CMA's control on prices, capacity utilisation and production restricted output and supplies for the end consumer, noted the CCI in August and that "cartelization was detrimental to the interests of consumers and the economy."