This news article was authored by Timsy Jaipuria and published in CNBC TV-18.
A total of 20 cement companies were engaged in anti-competitive conduct, cartelisation, people in the know told CNBC-TV18. |
The Competition Commission of India has finalised a report on its investigation into the alleged cement cartelisation operating in the eastern and southern regions of the country, people in the know told CNBC-TV18.
The CCI had started the investigation in 2019.
As many as 20 cement companies and manufacturers' associations have been under the CCI scanner. The CCI alleged that these firms were engaged in anti-competitive conduct, and cartelisation, sources said.
The investigation has also found evidence of price cartelisation. It claims to have found evidence of price fixing via phone calls, emails as well as WhatsApp messages, the sources added.
The investigation found that ACC Limited, UltraTech Cement, Dalmia Cement, Shree Cement, NUVOCO Vistas Corp Ltd, and Ambuja Cements indulged in anti-competitive agreements, sources.
The CCI asked the cement companies and manufacturers' association to submit their response in this regard by early August.
What is cement cartelisation?
Cartels crop up in the industry when competitors collude to control the price in agreement with one another. The direct impact is on the buyers. When all the manufacturers increase the cost simultaneously, the customers have no choice but to buy the product. Cartels also act as a barrier for new entrants in the market. Also, the lack of competition because of price-fixing hits innovation directly.
Background
The CCI had started examining complaints of cartelisation in the cement industry in 2019. The following year, it raided top five cement companies. It conducted the searches simultaneously in multiple offices across the country and seized electronic as well as physical data, pieces of equipment and material. The agency had also hired private IT experts to decode the data collected from the seize.
Meanwhile, Navin R Sahadeo, Director-Institutional Equities at Edelweiss Securities, said, “It should impact (stock prices) in the sense to an extent it will further deteriorate the pricing sentiment. The industry is already on the negative pricing power since last several months. Typically in the monsoon period pricing is generally weak, so this further spoils the negative sentiment.”
AnantLaw partners, Ms Anu Monga and Mr Rahul Goel have been representing Builders Association of India in the Cement Cartel case since the first initiation of investigation in 2009 including the Cement Cartel case that started in 2019.