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The Competition Commission of India (CCI) imposed a fine of Rs. 38 crore on 18 sugar mills and two associations for rigging the bids regarding a joint tender floated by oil marketing companies for procurement of ethanol for blending with petrol.
The CCI said in a statement, “A total penalty of Rs. 38.05 crore was imposed upon 18 sugar mills and their trade associations. Besides, a cease and desist order was also issued against them.”
The Commission observed that the bidders through their “impugned conduct” have violated the provisions of Section 3 of the Competition Act by acting in a “collusive and concerted manner which has eliminated and lessened the competition besides manipulating the bidding process in respect of the impugned tender floated by OMCs”.
The CCI also stated, “The bidders who participated in respect of the depots located in U.P., Gujarat and Andhra Pradesh in response to the joint tender floated by OMCs, were found to have acted in a concerted and collusive manner in submitting their bids.”
It added, “Such collusion was further strengthened from the fact that the bidders utilized the platform of ISMA and also acted on the signals emitted by EMAI which influenced the bidding behaviour of the parties.”
“The penalty was imposed by the Commission at 7% of the average relevant turnover of the sugar mills. However, a penalty at 10% of the average receipts was imposed upon the Trade Associations viz. ISMA and EMAI keeping in view the key role they played in facilitating bid rigging,” it said.
