CCI fines Shree Cement

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India: After setting a precedent by fining 11 cement companies a combined US$1.13bn in June 2012, the Competition Commission of India (CCI) has now imposed a penalty of US$71.5m on Shree Cement for indulging in restrictive trade practices.

The CCI has imposed the penalty on Shree Cement while issuing final order in the case against cement manufacturers and their trade body, the Cement Manufacturers Association (CMA). "The commission has also imposed a penalty on Shree Cement at the rate of 0.5 times its profits for the years 2009-2010 and 2010-2011 aggregating to US$71.5m," said the CCI in a statement.

"We have not seen the CCI order. Let us first go through the order and then we will decide on the future course of action in consultation with our lawyers, " commented H M Bangur, the managing director of Shree Cement.

The CCI found 11 cement manufacturers, including Shree Cement Limited and CMA, in contravention of the provisions of the Competition Act, 2002 which deal with anti-competitive agreements including cartels. As the cement companies (except Shree Cement) were already found to be in cartel in Case No. 29 of 2010 and penalised by the CCI via its order dated on 20 June 2012, the CCI decided not to order remedies including imposition of penalty on such companies again for the same period of contravention.

It has been reported by local media that since the fine in June 2011 Indian cement prices have continued to rise, with Rayalaseema Rashtra Samiti president Kuncham Venkatasubba Reddy threatening an indefinite hunger-strike over high prices.

Last modified on 01 August 2012

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