CCI asks 8 firms to cease from unfair biz practices, but refrains from imposing penalty

On Tuesday, the Competition Commission of India (CCI) asked eight firms and some of their officials to cease and desist from unfair business practices after their involvement in a tender floated by Eastern Railway. However, CCI did not impose any penalty on them due to the situation of the sector these firms belong to. These firms are Micro, Small, and Medium Enterprises (MSMEs).

The companies are alleged to have quoted identical bids in the tender floated by the Eastern Railway for axle bearings that are used for certain railway coaches.

Notably, the CCI-backed investigation arm Director General (DG) led a detailed investigation against these firms and found their involvement in cartelisation between 2015 to 2019 period.

As per the PTI report, in its order, the Competition Commission of India (CCI) said the current situation of the MSME sector in India is already under stress and bearing the impact of the economic situation arising from the outbreak of the coronavirus pandemic.

Thereby, if any penalty were to be levied on these firms, they are seen to be impacted. According to CCI, if a penalty were to be imposed, it may render these firms economically unviable while some of them may even exit the market and further reduce the competition.

Further, as per the report, representatives two out of eight of these firms admitted to the anti-competitive conduct committed by all of the entities in concert and collusion with each other. Also, the firms disclosed the modus operandi employed in the cartel.

These 8 firms are — Krishna Engineering Works, Chandra Brothers, Rama Engineering Works, Sriguru Melters & Engineers, Chandra Udyog, Janardan Engineering Industries, Jai Bharat Industries, and V K Engineering.

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