© Reuters. FILE PHOTO: A worker retreads a used rubber tire in a workshop in Agartala
By Aditya Kalra
NEU-DELHI (Reuters) – India's antitrust authorities are investigating JK Tire & Industries Ltd (NS 🙂 after a state government accused the company of submitting a bid and the investigation was expanded to other companies, according to Reuters sources and legal records.
The Indian Competition Commission (CCI) ordered an investigation last year after the northern state of Haryana stated that JK Tire had used unfair trading practices to supply tires for public transport vehicles.
The case details and the IHK's initial assessment were contained in a state court file filed by JK Tire on September 19, which challenged some of the watchdog's claims. The filing verified by Reuters has not yet been reported, and the Chamber of Commerce does not disclose any current probes in cartel cases.
According to the documents in the file, the state of Haryana informed the Chamber of Commerce that JK Tire was the only bidder in a tender and had given high prices. The watchdog ordered an investigation in November which found that "the non-participation of other tire manufacturers" indicated a "concerted act to falsify the offer".
A spokesman for JK Tire declined to comment "as the matter is currently open".
In August of this year, the Chamber of Industry and Commerce decided that the role of other tire manufacturers should be examined and expanded its examination to include this Apollo tires (NS :), CEAT (NS :), MRF (NS 🙂 and the Indian units of France Michelin (PA 🙂 and Germany Continental AG (DE :), said two sources familiar with the case.
It was not immediately clear whether the IHK had approached these tire companies with inquiries.
The sources declined to be identified as details of the probe were confidential. The Chamber of Commerce and the Haryana State Government did not respond to requests for comment. MRF, Michelin and Continental also did not respond to requests for comment, while CEAT and Apollo refused to comment.
Finding bid rigging could result in a potential fine up to three times the profit per year. The prices were set by the companies, or 10% of annual sales, whichever is greater.
JK Tire, with a market value of 190 million US dollars, accounts for 30 to 36% of the market for various types of tire variants, which is valued at around 9 billion US dollars annually.
The state of Haryana has claimed that JK Tire was the only bidder in the 2018 tender and that prices were around 34% higher than previous purchase prices, according to the documents.
"There seems to be a certain agreement or a certain understanding between the tire manufacturers … The matter requires a thorough and detailed investigation in order to uncover the entire procedure," says the regulation of the Chamber of Commerce from November 2019.
As part of the investigation, the Chamber of Commerce and Industry looked for "email dumps" belonging to some senior executives of the JK group for over five years this year and said they were essential to the investigation.
JK Tire has challenged the claim in the Punjab and Haryana High Court, saying it is cooperating with the investigation and that these executives' emails have limited or no relevance to the case.
The watchdog's probing team acted "completely unreasonable, arbitrary and whimsical," said JK Tire on the September 19 file.
The court will hear the case on October 28th.
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