Cartelisation charge: MRF to challenge CCI's Rs 622 crore penalty order

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Leading tyre manufacturer MRF Ltd on February 3 said it would explore legal options to challenge the Competition Commission of India's (CCI) order that imposes a Rs 622.09 crore penalty on the company.

The penalty was announced a day earlier on MRF, along with four other tyre makers, for "indulging in cartelisation".

In a regulatory filing, MRF said it has been advised that the CCI order "is not based on a proper appreciation of facts and law". The company will "accordingly take appropriate legal recourse in this matter", it added.

"MRF would like to reassure all its stakeholders, that it follows high standards of governance in its business practices," it further said.

The CCI, on February 2, said it has imposed a penalty of of Rs 425.53 on Apollo Tyres, Rs 252.16 crore on CEAT Ltd, Rs 309.95 crore on JK Tyre and Rs 178.33 crore on Birla Tyres, apart from Rs 622.09 crore on MRF.

"The tyre manufactures had exchanged price-sensitive data amongst them through the platform of their association, namely, Automotive Tyre Manufacturers Association (ATMA), and had taken collective decisions on the prices of tyres," the fair trade regulator noted.

The tyre manufacturers and ATMA were held guilty of contravention of the provisions of Section 3 of the Competition Act, which prohibits anti-competitive agreements including cartels, during 2011-2012, it said.

"The Commission also found that ATMA collected and compiled information relating to company-wise and segment-wise data (both monthly and cumulative) on production, domestic sales and export of tyres on a real-time basis," the CCI added.

Apart from the penalties levied on the tyre manufacturers, a penalty of Rs 0.084 crore has been imposed on ATMA, it said.

"ATMA was also directed to disengage and disassociate itself from collecting wholesale and retail prices through the member tyre companies or otherwise," the statement further noted.