The Competition Commission of India (CCI) has found evidence of wrongdoing and bid rigging in an alleged price-fixing arrangement among three cement companies that were supplying to Oil and Natural Gas Corporation, Reuters reported.
The matter came to light after ONGC noticed an unusual pattern in a cement tender, where identical pricing was submitted by the firms.
Suspicion Over Identical Bids
In 2018, India's largest oil explorer came out with a tender for a cement order. After receiving competitive bids, it sensed that something was not right, all of these were exactly Rs 7,000 per tonne.
After questioning the unusual similarity, ONGC received a response from an executive from India Cements that seven was his "lucky number".
This triggered concern within the ONGC, and the corporation lodged an antitrust complaint against three cement companies.
Detailed Investigation
The key details, regarding the probe conducted by the CCI, were outlined in a confidential investigation report. The five-year probe found a decade of price collusion targeting state-run ONGC, as per Reuters.
In its report, the regulator stated that the alleged "cartel period" ran for 12 years between 2007 and 2018 for two companies, Dalmia Cement (Bharat), part of Dalmia Bharat, and Shree Digvijay.
India Cements, meanwhile, remained a part of this for a shorter duration between 2017 and 2018.
The 90-page report has highlighted concealed attempts at collusion by Indian companies. It states that the firms' bid rigging, discussions of supply patterns, as well as efforts to oust foreign bidders were "substantiated from strong evidence in the form of communication, meetings, emails, admission".
For now, the cement companies have been asked to provide their response to the report, following which the watchdog will issue a final order.
The report highlights that fines can go up to three times the company's profit or 10% of their turnover for each year of wrongdoing.
Notably, Dalmia Bharat recorded annual revenues of $1.5 billion in FY 2024-25, while Shree Digvijay and India Cements reported $79 million and $444 million, respectively.
According to Reuters, the probe has put the onus of breaches on eight top executives. Among these include Rajeev Nambiar, former managing director of Shree Digvijay; Y.H. Dalmia, chairman of Dalmia Bharat; and N. Srinivasan, former MD of India Cements.
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Also, the report referred to testimony from Shree Digvijay, senior vice president Prem R Singh, who said, "the prime objective for quoting the identical price was to allocate almost equal volumes and revenue amongst companies".
Blocking Foreign Competition
The report highlights that Shree Digvijay and Dalmia targeted foreign companies that bid by flagging "prickly issues".
On repeated occasions, they filed complaints with the government regarding foreign bidders' lack of certification and how the government should promote domestic firms.
Among the foreign bidders were Schlumberger, now known as SLB, UAE-based Classic Oil Field Chemicals, and Bell Weather.
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Investigators have concluded that the companies tried at least once to put pressure on ONGC to cancel foreign bids by deciding to "restrict supply" of cement to the oil explorer. This breaches antitrust laws.
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