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JK Tyre, others companies face antitrust scrutiny in bid-rigging case

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NEW DELHI: Antitrust regulator is investigating JK Tyre & Industries Ltd after a state authorities accused the corporate of bid rigging, and the probe has been expanded to different companies, in accordance with sources and authorized filings seen by Reuters.

The Competition Commission of India (CCI) final 12 months ordered a probe after Haryana stated JK Tyre employed unfair commerce practices whereas bidding to produce tyres for public transport autos, a court docket submitting confirmed.

The case particulars and CCI’s preliminary evaluation had been contained in a Sept. 19 state court docket submitting made by JK Tyre contesting a number of the watchdog’s calls for. The submitting, reviewed by Reuters, has not beforehand been reported and the CCI doesn’t disclose present probes into cartel circumstances.

According to paperwork within the submitting, Haryana state instructed the CCI that JK Tyre was the only real bidder in a young and quoted excessive costs. The watchdog in November ordered a probe saying “non-participation by other tyre manufacturers” was suggestive of a “concerted act to rig the bid”.

A JK Tyre spokesman declined to remark “as the matter is currently subjudice.”

In August this 12 months, the CCI determined the position of different tyre companies must be examined and expanded its scrutiny to incorporate Apollo Tyres , CEAT , MRF , and the Indian items of France’s Michelin and Germany’s Continental AG , two sources aware of the case stated.

It was not instantly clear whether or not the CCI has approached these tyre companies with inquiries.

The sources declined to be recognized as particulars of the probe had been confidential. The CCI and the Haryana state authorities didn’t reply to requests for feedback. MRF, Michelin and Continental additionally didn’t reply to requests for feedback, whereas CEAT and Apollo declined to remark.

A discovering of bid-rigging may result in a possible wonderful of as much as 3 times the revenue in every year costs had been mounted by the businesses, or 10% of annual income, whichever is larger.

JK Tyre, which has a market worth of $190 million, says it accounts for 30-36% of the marketplace for several types of tyre variants that’s value some $9 billion yearly.

“EMAIL DUMPS”

Haryana state has alleged JK Tyre was the only real bidder within the tender in 2018 and its costs had been round 34% larger than earlier buy charges, the paperwork present.

“There appears to be some arrangement or understanding amongst the tyre manufacturers … The matter warrants a thorough and detailed investigation to unearth the entire modus operandi resorted to,” the CCI’s Nov. 2019 order stated.

As a part of the probe, the CCI this 12 months sought “email dumps” over 5 years belonging to some senior executives within the JK group, saying they had been important for the investigation.

JK Tyre has challenged that demand at the High Court of Punjab and Haryana, saying it was cooperating with the investigation and the emails of these executives had restricted or no relation to the case.

The watchdog’s probe crew was “acting in a completely unreasonable, arbitrary and whimsical manner”, JK Tyre stated within the Sept. 19 submitting.

The court docket will subsequent hear the case on Oct. 28.




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