COMPAT directs cement firms to deposit Rs 630 cr
New Delhi: The Competition Appellate Tribunal Friday ordered 10 cement producers, including UltraTech, Ambuja and ACC, and their association CMA to deposit Rs 630 crore as it hears their appeal against a record amount of penalty imposed by competition watchdog CCI last year.
The amount COMPAT asked some of the nation's biggest cement manufacturers and their lobby group CMA to cough up within four weeks represents 10 percent of the Rs 6,307 crore fine that antitrust body Competition Commission of India (CCI) had fixed for alleged price fixing.
The companies include Aditya Birla Group-member UltraTech Cement, Holcim-controlled Ambuja Cements and ACC, Jaiprakash Associates, BCCI President Srinivasan-run India Cements, Madras Cements and the Indian unit of France's Lafarge SA.
While cement makers are yet to take a call on whether to challenge the interim order before the Supreme Court, industry sources say a few of them are actually mulling the option.
"... We would chose to grant stay to the penalties, however, with a condition that the appellants (cement makers) deposit 10 percent of the penalties inflicted (by CCI)," COMPAT said in its order directing cement firms to deposit the amount within a month.
"We also make it clear that if the penalties are not so deposited, the appeal shall be treated as dismissed without further reference to the Court," it added.
The three-member bench, headed by Justice V S Sirpurkar said that if the penalties were not so deposited, the appeal shall be treated as dismissed without further reference to the court.
Cement makers along with the industry lobby group Cement Manufacturers' Association (CMA) had challenged the order of the fair trade regulator Competition Commission of India (CCI) imposing Rs 6,300 crore penalty for forming cartel.
Although the tribunal stayed the penalty, but the cease and desist order would continue against them as the tribunal "prima-facie" found no wrong in CCI's findings against them.
"As regards, the orders of 'cease and desist', we do not find anything wrong at least prima-facie. We, therefore, refuse to stay that order against the appellants, including the CMA," the bench said.
The matter would now come up for final hearing in August.
COMPAT's order came over a batch of petitions filed by the cement producers - Ultratech Cement, ACC Ltd, Lafarge India, India Cement, JP Associates, Binani Cement, Ambuja Cement, Madras Cement, J K Cements, Century Textiles and industry association CMA - challenging CCI's Rs 6,307 crore penalty imposed on them in June, 2012.
"The act and conduct of the cement companies establish that they are a cartel. The Commission holds that the cement companies acting together have limited, controlled and also attempted to control the production and price in the market in India," CCI had earlier said.