CCI Penalizes Moulded Fibreglass Products and Others for Engaging in Bid-Rigging and Other Cartel Conduct

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Sep 30, 2022

CCI Penalizes Moulded Fibreglass Products and Others for Engaging in Bid-Rigging and Other Cartel Conduct

On April 04, 2022, CCI accepted allegations of bid-rigging and cartel conduct against Moulded Fibreglass Products (‘OP-1’), Power Mould (‘OP-2’), Black Burn and Co. Pvt. Ltd. (‘OP-3’), Polyset Plastics Private Ltd. (‘OP-4’), M/s Anju Techno Industries (‘OP-5’), Calstar Steel Limited (‘OP-6’), Jai Polypan Pvt. Ltd. (‘OP-7’), Polymer Products of India Ltd. (‘OP-8’), M/s Micro Engineers (‘OP-9’), Quadrant EPP Surlon India Ltd. (Now MCAM Surlon India Ltd.) (‘OP-10’) and Skylark Projects Pvt. Ltd. (‘OP-11’) (together ‘OPs’). ^[1]

Reference was made to CCI by the Chief Materials Manager, North Western Railways alleging that OP-1 and OP-2 engaged in cartelisation in the bidding process for High Performance Polyamide (‘HPPA’) bushes and Self Lubricating Polyester Resin (‘SLPR’) bushes used in Bogie Mounted Brake Cylinder Coaches. In the reference, it was alleged that OP-1 and OP-2 had quoted identical prices to the last 2 decimal points in their bids, despite being in different locations in response to a tender.

During DG’s investigation, OP-1, OP-3, OP-7 and OP-10 and their individuals applied for leniency. Further to this, the DG impleaded OP-3 to OP-11 in its investigation.

Based on evidence collected by the DG, CCI found that: (i) all the OPs have been engaged in identical or similar trade of goods i.e. supply of HPPA/SLPR bushes; (ii) the OPs stayed in communication with each other via e-mails and WhatsApp; (iii) there was a clear understanding between the OPs in relation to determination and revision of prices in regard to tenders floated by Railways for procurement of Brake Gear Bushes; (iv) the OPs controlled the supply in the market by regulating who and when shall supply the products; and (v) the OPs shared the market amongst them in terms of percentage with addition and reduction with each tender.

CCI concluded that the OPs and their individuals are guilty of bid rigging and cartel conduct. Accordingly, CCI directed the OPs to cease and desist from indulging in similar practices and imposed penalty: (i) on the OPs at the rate of 5% of the average turnover from the sale of HPPA/SLPR bushes in the financial years from 2017-2020; and (ii) on individual of the OPs at the rate of 5 percent of their average income of the financial years.

In relation to leniency applicants, CCI granted: (i) OP-3 and its individuals, 80% reduction of penalty; (ii) OP-1, 40% reduction of penalty; (iii) OP-7, 30% reduction of penalty; and (iv) OP-10, 20% reduction of the penalty.

[1] Reference Case No. 03 of 2018.

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