The Competition Commission of India (CCI) has identified 11 cement companies involved in cartelisation (an agreement among companies which collectively attempt to affect market prices by controlling production and marketing) and levied a penalty of over Rs 6,300 crore.
According to the orders passed by CCI, all the 11 companies have to pay 50 percent of their profit for the fiscal years 2010 and 2011 within 90 days. In addition, CCI also fined Cement Manufacturers Association, an amount of Rs. 73 lakh, for providing the platform for cartelisation.
The CCI after observing the complaint filed by the Builders Association of India passed the orders to the respective companies. All the companies were under scrutiny for a period of one year. According to the CCI officials since India is the second biggest producer of cement after China, and it is the crucial input in construction industry, this kind of cartelisations not only affect the consumer but also are detrimental to the whole economy.
According to the sources, many companies are not going to accept this and they in turn are planning to contest the order. They are exploring for all the legal options to contest the ruling.
Of the 6,300 crore fine, Holcim Group’s ACC and Ambuja Cement together have to pay Rs 2,312 crore, UltraTech Cement Rs 1,175 crore, Lafarge India Rs 480 crore, JP Associate Rs 1,324 crore, Century Textile and Industry Rs 274 crore, Madras Cements Rs 259 crore, Binani Cements Rs 167 crore, India Cements Rs 187 crore and JK Cement Rs 129 crore.
Source: The Hindu