Shares Of Apollo Tyres To MRF Fall As CCI Levies Rs 1,800-Crore Fine For Cartelisation
CCI levied the fine on JK Tyres, Apollo Tyres, MRF, Birla Tyres, CEAT and the association ATMA.
India’s competition regulator imposed a Rs 1,788-crore penalty on five tyremakers and their association for indulging in cartelisation.
The Competition Commission of India levied the fine on JK Tyre & Industries Ltd., Apollo Tyres Ltd., MRF Ltd., Birla Tyres Ltd., CEAT Ltd. and the Automotive Tyre Manufacturers Association for “acting in concert to increase the prices of cross ply/bias tyres variants sold by each of them in the replacement market and to limit and control production and supply”, according to the regulator’s statement.
Apollo Tyres: Rs 425.5 crore
MRF : Rs 622.1 crore
CEAT: Rs 252.1 crore
JK Tyre: Rs 309.9 crore
Birla Tyres: Rs 178.3 crore
ATMA: Rs 8.4 lakh
The five were “found guilty of contravention” of the provisions of the Competition Act, 2002, which prohibits anti-competitive agreements including cartels, the statement said.
The companies, it said, “exchanged price-sensitive data among them through the platform of their association” and had taken collective decisions on the prices of tyres.
Certain individuals of the tyre companies and the association were also held liable for the anticompetitive conduct.
CEAT, in an exchange filing on Thursday, said there has been no wrongdoing on its part and it has never indulged in or was part of any cartel or undertook any anti-competitive practices. “The order is being studied for appropriate legal recourse.”
Apollo Tyres, too, told the bourses that it does not agree with the findings of the commission and will take necessary steps under the law to appeal against the order after a more detailed examination of the full order. The company, it said, “follows the highest level of governance practices and operates within the letter and spirit of the law”.
Birla Tyres said it is yet to receive an order from the CCI, but “on merits it has sufficient grounds for an appeal”.
According to MRF, the order of the commission is not based on a “proper appreciation of facts and law” and it would accordingly take appropriate legal recourse. JK Tyres said it was reviewing the order in consultation with its legal advisers, and would evaluate further legal options. It reiterated that there has been no wrongdoing on its part.
Shares of the five tyremakers fell in early trade on Thursday. Birla Tyres declined as much as 7.3%, the most since Jan. 24. JK Tyres fell 4.1%, while CEAT fell 5.5% as well. MRF and Apollo Tyres fell as much as 2% and 4.4%, respectively.
All stocks, barring CEAT, closed Thursday’s trade with losses with Birla Tyres down the most at 2.8%.