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CCI issues cease and desist order against firms guilty of bid rigging, cartelization in FCI tenders

CCI issues cease and desist order against firms guilty of bid rigging, cartelization in FCI tenders

The CCI, however, has refused to impose any monetary penalty considering four out of six firms had filed lesser penalty applications and admitted their conduct and confessed their modus operandi.

Competition Commission of India Competition Commission of India

Competition Commission of India (CCI) has issued final order against six firms found in contravention of the provisions of the Section 3(1) of the Competition Act, 2002 with Section 3 (3) (d) which proscribe anti-competitive agreements.

The competition watchdog discovered that these firms indulged in the cartelisation in the supply of Low Density Poly Ethylene (LDPE) covers to the Food Corporation of India (FCI) during the period 2005-2017.

The CCI issued a cease and desist order against these firms found guilty of bid rigging and cartelisation in the FCI tenders but refused to impose any monetary penalty considering four out of six firms had filed lesser penalty applications and admitted their conduct and confessed their modus operandi. It added that these firms are MSMEs with less staff/turnover.

The firms in question include Shivalik Agro Poly Products Ltd, Climax Synthetics Pvt Ltd, Climax Synthetics Pvt Ltd, Arun Manufacturing Services Pvt Ltd, Bag Poly International Pvt Ltd, Shalimar Plastic Industries and Dhanshree Agro Poly Product.

These firms determined prices directly or indirectly, allocated tenders, coordinated bid prices and manipulated the bidding process.

From 2005 to 2017, the FCI floated total 7 tenders and awarded the impugned tenders except Tender No.1 and Tender No.5 as they were scrapped. “Prior to 2012, the bidders quoted identical bids and in post negotiations after opening the tender, reduced the bid amount identically, but in 2012, the tender form was modified, prohibiting the Informant (FCI) from negotiating with bidders after opening the tender,” the CCI order in the case read.

It further stated that the firms were involved in quoting identical rates or cosmetically differing rates in the impugned tenders. Thus, they “were alleged to be involved in the anti-competitive conduct of bid-rigging in violation of the provisions of Section 3 of the Act.”

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Published on: Nov 01, 2021, 12:34 PM IST
Posted by: Mehak Agarwal, Nov 01, 2021, 12:30 PM IST