The Competition Commission of India has imposed a fine of Rs 317.91 crore on three aluminum phosphide tablet (APT) manufacturers for cartelisation and price manipulation.
The companies, United Phosphorus, Excel Crop Care and Sandhya Organics, that supply the tablets to Food Corporation of India (FCI), will have to pay penalty at the rate of nine per cent on the average of three years' turnover.
United Phosphorus has been asked to shell out Rs 252.44 crore, while Excel Crop will be required to pay Rs 63.90 crore and Sandhya Organics Chemicals Rs 1.57 crore. APT, a kind of aluminum packaging material, is used by FCI to preserve foodgrain.
In a letter written to the competition watchdog last year, FCI had drawn attention to the rise in its cost of procurement because of an anti-competitive agreement among these manufacturers.
CCI said it found these companies entering into a non-compete agreement and that their acting together and quoting identical prices had deprived FCI of competitive bid rates for procuring the tablets.
It also said that as a result of this agreement among the companies, the price of the tablets has nearly doubled between 2007 and 2009.
The shares of United Phosphorus were trading at Rs 120.50, down 5.53 per cent on the BSE.