The Competition Commission on Tuesday directed eight firms and some of their officials to cease and desist from unfair business practices but refrained from imposing penalties on them in a case related to cartelisation in bidding for an Indian railways tender.
It was alleged that the firms quoted identical bids in the tender floated for axle bearings which is used for certain railway coaches. The tender was floated by the Eastern Railway. A detailed probe by the regulator's investigation arm Director General (DG) found that the firms indulged in cartelisation during the 2015 to 2019 period.
Since these entities are Micro, Small and Medium Enterprises (MSMEs), the regulator decided not to impose any penalties considering the current situation of the sector. However, the watchdog directed them to cease and desist from anti-competitive practices.
The entities are Krishna Engineering Works, Chandra Brothers, Rama Engineering Works, Sriguru Melters & Engineers, Chandra Udyog, Janardan Engineering Industries, Jai Bharat Industries and V K Engineering. They are collectively referred to as Opposite Parties (OPs). In its order, the Competition Commission of India (CCI) said the current situation of MSME sector in India is already under stress and bearing the impact of the economic situation arising from the outbreak of the coronavirus pandemic.
In such a situation, if any penalty were to be imposed on these firms, it may render these firms economically unviable and some of these firms may even exit the market and further reduce the competition, the regulator said. According to CCI, representatives of two out of the eight firms admitted to the anti-competitive conduct perpetrated by all the entities in concert and collusion with each other. They had also disclosed the modus operandi employed in the cartel.
In a release, CCI said it refrained from imposing any monetary penalty considering the firms were MSMEs with limited staff and turnover, the cooperative and non-adversarial approach adopted by firms in acknowledging their involvement as well as the economic stress wrought upon the MSME sector in the wake of the pandemic.
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