In 2018, a curious incident unfolded when India’s largest oil explorer, ONGC, noticed something odd about the bids for a cement supply order. Every bid came in at precisely 7,000 rupees a tonne. Wondering what was going on, ONGC investigated and received a cheeky reply from an executive at India Cements, who claimed that seven was his “lucky number.”
This led ONGC to file an antitrust case against three Indian companies: Dalmia Cement, Shree Digvijay, and India Cements, after a five-year investigation revealed they had been colluding on prices for over a decade, from 2007 to 2018. The Competition Commission of India (CCI) reported evidence of these companies working together to manipulate prices. There were records of meetings, emails, and even admissions from involved parties, solidifying the case against them.
According to a 90-page report, the cement players attempted to block foreign companies from competing and shared market insights among themselves. This scrutiny of domestic firms comes amid increasing antitrust focus in India, where regulators have also been examining foreign giants like Apple and Amazon.
Dalmia Bharat, Shree Digvijay, and India Cements face hefty penalties if the CCI finds them guilty. Penalties could rise to three times their profits or 10% of their annual turnover for each year they engaged in this behavior. In the financial year 2024-25, Dalmia Bharat reported $1.5 billion in revenue, while Shree Digvijay and India Cements reported $79 million and $444 million, respectively.
The investigation isn’t just about numbers; it reflects a significant shift in how India regulates its markets. Gautam Shahi, a partner at Dua Associates, noted that there’s a growing commitment from the government to tackle issues in public procurement. This case highlights broader concerns about fairness in India’s economic landscape.
As part of their collusion, the companies were reported to have shared detailed strategies on pricing to allocate volumes and territories among themselves. Meetings were held specifically to calculate transportation costs from their factories to delivery sites, ensuring they maintained control over pricing structures.
Interestingly, the investigation’s findings seem to resonate with the sentiments expressed on social media. Observers have voiced concerns about corruption in the cement industry, sparking discussions on how public trust can be restored. The situation calls attention to the need for transparency and accountability in business practices.
In conclusion, this ongoing situation emphasizes the importance of ethical competition in the market. It serves as a reminder that regulatory bodies are becoming increasingly vigilant, not just towards foreign entities but also homegrown firms that might exploit their positions.
Source link
shree digvijay,india cements,ongc,India Cement cartel,ONGC cement tender investigation,Competition Commission of India,antitrust case India,Dalmia Bharat price collusion,cement procurement violation,cement industry collusion India,bid rigging in cement sector,Shree Digvijay cement bid rigging,foreign bidders in India cement,oilfield services,oil and natural gas corporation,ultratech,excel,tata steel,jsw steel
