Business

Tyre stocks plummet as the CCI imposes a fine on five businesses for alleged cartelization.

Following the CCI’s findings, it was determined that the tyre manufacturers had exchanged price-sensitive data among themselves through their organization’s platform, violating the statute that forbids anti-competitive agreements.

A monetary fine has been levied on five major tyre manufacturers by the Competition Commission of India (CCI) for “indulging in cartelization,” according to a statement released on February 2.

The CCI said that Rs 425.53 crore were assessed against Apollo Tyres, Rs 622.09 crore against MRF Ltd, Rs 252.16 crore against CEAT Ltd, Rs 309.95 crore against JK Tyre, and Rs 178.33 crore against Birla Tyres.


On the Bombay Stock Exchange, shares of Apollo Tyres fell by 0.95 per cent to Rs 223.35 a share. A similar pattern could be observed in the shares of Ceat, which hit a 52-week low on Thursday and were trading 0.29 per cent down at Rs 1092.75, a claim at the same time. Following the imposition of fines by the CCI on these businesses, MRF, JK Tyre, and Birla tyres saw their share prices rise by 0.15 per cent, 1.87 percent, and 2.88 per cent, respectively, to Rs 71415, Rs 133.85, and Rs 25.25 per share on the BSE.

ceat and other tyre stocks trade lower after cci imposes fine over cartelisation

For “engaging in cartelization by acting in concert to increase the prices of cross-ply/bias tyre variants sold by each of them to “restrict and manage production and supply in the abovementioned market,” the CCI punished Apollo Tyre, Ceat, MRF, JK Tyre, and Birla Tyre, according to the CCI. Apollo Tyre was fined Rs. 50 lakh while Ceat was fined Rs. 50 lakh.

It was discovered that “the tyre manufacturers had exchanged price-sensitive data amongst themselves through the platform of their association, namely, the Automotive Tyre Manufacturers Association (ATMA), and that they had taken collective decisions on the prices of tyres,” according to the fair trade regulator.

See also  India records 41,157 fresh Covid cases

According to the statement, the five tyre manufacturers and the ATMA were violated Section 3 of the Competition Act, which forbids anti-competitive arrangements, including cartels, in the period 2011-2012.

As the CCI said, “the Commission further determined that ATMA gathered and collated information relevant to company and segment-wise statistics (both monthly and cumulative) on tyre manufacturing, domestic sales, and exports in real time,” as well as information on domestic sales and exports of tyres.

A penalty of Rs 0.084 crore has been imposed on ATMA in addition to the fines issued against the tyre producers.

According to the statement, “ATMA has also been asked to disengage and dissociate itself from collecting wholesale and retail pricing through the member tyre firms or in any other manner.”

Notably, the CCI ruling, which found the tyre makers and ATMA liable, was issued the first of its type, took place in August 2018. The order was kept under wraps until further notice because the tyre manufacturers had opted to pursue their legal options in the higher courts. The Supreme Court of the United States denied their appeal on January 28.

What is the Automotive Tyre Manufacturers Association (ATMA), and what does it do?

Located in New Delhi, India, the Automotive Tyre Manufacturers’ Association (ATMA) is one of the country’s most active and well-known national industry organizations. The ATMA has its headquarters there. Being a representative organization of nine significant tyre businesses in India that account for more than 90 per cent of tyre manufacturing, ATMA has been awarded the coveted distinction as the authentic voice of the Indian tyre industry. ATMA was founded in 1982 and is headquartered in Mumbai.

Initially, ATMA serves as a link between the government and the tyre sector to promote and protect the interests of the Indian tyre industry in general. The Association seeks to be an active participant in the policy-making process. It organizes frequent meetings with government agencies to address the sector’s issues in today’s constantly changing economic climate.

See also  Cos can incorporate rewards, incentives to achieve environmental, social and governance goals

atma annual convention 2018 to focus on tyre industry

To represent the Indian tyre industry’s point of view on various problems, the Association serves as a liaison between the industry and the media, opinion leaders, non-governmental organizations, and other industry associations throughout the world.

Following the CCI’s findings, it was determined that the tyre manufacturers had exchanged price-sensitive data among themselves through their organization’s platform, violating the statute that forbids anti-competitive agreements.

A monetary fine has been levied on five major tyre manufacturers by the Competition Commission of India (CCI) for “indulging in cartelization,” according to a statement released on February 2.

The CCI said that Rs 425.53 crore were assessed against Apollo Tyres, Rs 622.09 crore against MRF Ltd, Rs 252.16 crore against CEAT Ltd, Rs 309.95 crore against JK Tyre, and Rs 178.33 crore against Birla Tyres.

indian tyre industry hurt by the raw material shortage
On the Bombay Stock Exchange, shares of Apollo Tyres fell by 0.95 per cent to Rs 223.35 a share. A similar pattern could be observed in the shares of Ceat, which hit a 52-week low on Thursday and were trading 0.29 per cent down at Rs 1092.75, a claim at the same time. Following the imposition of fines by the CCI on these businesses, MRF, JK Tyre, and Birla tyres saw their share prices rise by 0.15 per cent, 1.87 percent, and 2.88 per cent, respectively, to Rs 71415, Rs 133.85, and Rs 25.25 per share on the BSE.

For “engaging in cartelization by acting in concert to increase the prices of cross-ply/bias tyre variants sold by each of them to “restrict and manage production and supply in the abovementioned market,” the CCI punished Apollo Tyre, Ceat, MRF, JK Tyre, and Birla Tyre, according to the CCI. Apollo Tyre was fined Rs. 50 lakh while Ceat was fined Rs. 50 lakh.

See also  Gautam Adani's wealth stoops up by 50% during the pandemic, Congress leaders question the integrity of the surge. While all other income groups suffering from the crisis, how come billionaires kept on increasing their wealth so enormously?

It was discovered that “the tyre manufacturers had exchanged price-sensitive data amongst themselves through the platform of their association, namely, the Automotive Tyre Manufacturers Association (ATMA), and that they had taken collective decisions on the prices of tyres,” according to the fair trade regulator.

According to the statement, the five tyre manufacturers and the ATMA were violated Section 3 of the Competition Act, which forbids anti-competitive arrangements, including cartels, in the period 2011-2012.

As the CCI said, “the Commission further determined that ATMA gathered and collated information relevant to company and segment-wise statistics (both monthly and cumulative) on tyre manufacturing, domestic sales, and exports in real time,” as well as information on domestic sales and exports of tyres.

A penalty of Rs 0.084 crore has been imposed on ATMA in addition to the fines issued against the tyre producers.

According to the statement, “ATMA has also been asked to disengage and dissociate itself from collecting wholesale and retail pricing through the member tyre firms or in any other manner.”

Notably, the CCI ruling, which found the tyre makers and ATMA liable, was issued the first of its type, took place in August 2018. The order was kept under wraps until further notice because the tyre manufacturers had opted to pursue their legal options in the higher courts. The Supreme Court of the United States denied their appeal on January 28.

 

 

aadhya

Journalism student with a keen interest in Business world

Related Articles

Leave a Reply

Your email address will not be published.

Back to top button
%d bloggers like this:

Adblock Detected

Please consider supporting us by disabling your ad blocker