Rs.6,000 crore penalty on 11 cement firms for price fixing
New Delhi, June 21 (IANS) The Competition Commission of India (CCI) Thursday imposed a hefty penalties amounting to over Rs.6,000 crore ($1.1 billion) on 11 cement companies including Ambuja Cements, ACC, Ultratech and India Cements, terming them guilty of forming a cartel and fixing prices.
This is the highest ever penalty imposed by the competition watchdog.
The CCI has asked the 11 cement firms to pay as penalty 50 percent of their profits recorded in financial year 2009-10 and 2010-11.
"The penalty amount so worked out amounts to more than Rs.6,000 crore," according to a statement issued by the ministry of corporate affairs.
The cement manufacturers who have been penalised for cartelisation are ACC, Ambuja Cements Limited, Ultratech Cements, Grasim Cements now merged with Ultratech Cements, JK Cements, India Cements, Madras Cements, Century Cements, Binani Cements, Lafarge India and Jaypee Cements.
The commission has also imposed penalty on the Cement Manufacturers Association.
"While imposing penalty, the Commission has considered the parallel and coordinated behaviour of cement companies on price, dispatch and supplies in the market," the statement said.
The competition watchdog CCI has imposed the penalty on the leading cement firms following a probe by Director General of Investigation on complaint filed by Builders Association of India.
The Commission has found that the cement companies have not utilised the available capacity so as to reduce supplies and raise prices in times of higher demand.
The Commission has also observed that the act of these cement companies in limiting and controlling supplies in the market and determining prices through an anti-competitive agreement is not only detrimental to the cause of the consumers but also to the whole economy since cement is a crucial input in construction and infrastructure industry vital for economic development of the country.
The penalised cement manufacturers have been asked to deposit the penalty amount within 90 days.
They have also been directed to "cease and desist" from indulging in any activity relating to agreement, understanding or arrangement on prices, production and supply of cement in the market.
The Cement Manufacturer Association has been asked to disengage and disassociate itself from collecting wholesale and retail prices through the member cement companies and also from circulating the details on production and dispatches of cement companies to its members.
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