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In a major blow to cement companies, the National Companies Court of Appeals upheld the penalty of Rs 6,700 imposed by the Competition Commission of India on 11 cartel companies.
ACC, UltraTech and JaiprakashAssociates will be the most affected. trio was asked to pay more than Rs 1,000 crore each.
The order would also affect the resolution value for companies like Binani Cement, which is still under the jurisdiction of the National Company Law Tribunal, waiting to see if it will be sold to Kumar Mangalam Birla- led UltraTech or the Dalmia Bharat Group
While ACC said that it would approach the apex court, UltraTech would take "appropriate action" as advised by its attorneys.
But the chances of winning are slim as NCLAT, now CCI's appeal body, has fully supported CCI's findings and order, even when qualifying the penalties of lean.
"Regarding the amount of the penalty order, we find that the commission imposed simple penalties, minimum penalty, no interference is requested against the same.We do not find any merit in these calls, so they are fired, "said the NCLAT order issued Wednesday, rejecting the call of the cement manufacturers.
Reacting to the order, the ACC declared that it would move the court apex. "India's Competition Commission vacates its order dated August 31, 2016, imposed a penalty of Rs 1,147.59 crore on the company.In appeal by the company, NCLAT in his order pbaded today would have confirmed said order.The company believes that, basically, it has sufficient grounds for a successful appeal and intends to file the same with the Hon'ble Supreme Court of India, "said ACC in a statement issued Wednesday
. The NTCB concluded that the competition watchdog had established sufficient grounds to establish that an agreement was in place and that the prices were rigged.
CCI had pointed out "an unprecedented trend for the percentage of price increase in the five regions" – center, north, east, west and south.
"It is clear that the commission, in dealing with the market , dealt with the "relevant market", that is, all regional markets for cement. The Commission examined not only the state-by-state market but also the regional market and the percentage range of price changes between 2007 and 2011. "
The CCI case was filed by the Builders Association of India under Section 19 (1) (a) of the Competition Act 2002, alleging an anti-competitive agreement against Cement Manufactures & # 39; Association and 11 companies.
Despite publication by CCI of a order followed by detailed investigations, none of the companies bothered to total penalty amount after paying 10% of their respective actions at the Competition Appeal Tribunal (Compat). [19659002] "Your company, backed by a legal opinion, believes that it has a good cause in both cases and therefore, no provision UltraTech disclosed in its annual report for fiscal year 18. [19659002] The government, meanwhile, has worn every Compat's business before NCLAT and the hearing was completed in August 2016.
Of the 11 companies, J Aiprakash Associates would be hit harder than Rs 1.323.60 penalized crore levied on it's more than $ 50,000. a quarter of its cement revenues at Rs 4,329.72 crore, accounting for 65.44% of the overall business figure.
But the case of Binani Cement would be curious as the statutory obligations listed against the company for the new owner to settle do not show the amount of the penalty of Rs 167 crore, the sources said.
However, a new unrecorded fordability would not surprise his new promoter.
"Since all property and debts would be with the new owner, it would be his responsibility to pay the contributions.Benders would have considered the penalty while preparing their resolution plans," said Sutanu Sinha, a professional Resolution with BDO Restructuring.
From 1 August, NCLT would begin to hear the case of Binani Cement on a daily basis on cross-petitions filed by Rajputana Properties, a Dalmia Bharat group company, and UltraTech, the two potential bidders
IMPACT [19659021] ACC, UltraTech and Jaiprakash Associates will be hardest hit as the trio has been asked to pay more than Rs 1,000 crore each
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