Shares of cement makers today rose by nearly 3 per cent after the Competition Appellate Tribunal (COMPAT) ordered 11 companies to deposit Rs 630 crore as it hears their appeal against a record amount of penalty imposed by competition watchdog CCI last year.
Jaiprakash Associates scrip rose by 2.56 per cent, while Ambuja Cements settled 2.06 per cent higher. Among others, ACC was up 0.71 per cent, UltraTech Cement (0.77 per cent).
The amount COMPAT asked some of the nation’s biggest cement manufacturers and their lobby group CMA to cough up within four weeks represents 10 per cent of the Rs 6,307 crore fine that antitrust body Competition Commission of India (CCI) had fixed for alleged price fixing.
“... we would chose to grant stay to the penalties, however, with a condition that the appellants (cement makers) deposit 10 per cent of the penalties inflicted (by CCI),” COMPAT said in its order directing cement firms to deposit the amount within a month.
“We also make it clear that if the penalties are not so deposited, the appeal shall be treated as dismissed without further reference to the Court,” it added.
While cement makers are yet to take a call on whether to challenge the interim order before the Supreme Court, industry sources say a few of them are actually mulling the option.
The companies involved in the case include Aditya Birla Group-member UltraTech Cement, Holcim-controlled Ambuja Cements and ACC, Jaiprakash Associates, BCCI President Srinivasan-run India Cements, Madras Cements and the Indian unit of France’s Lafarge SA.
Cement makers along with the industry lobby group Cement Manufacturers’ Association (CMA) had challenged the order of the fair trade regulator CCI imposing Rs 6,300 crore penalty for forming cartel.
COMPAT’s order came over a batch of petitions filed by the cement producers — Ultratech Cement, ACC Ltd, Lafarge India, India Cement, JP Associates, Binani Cement, Ambuja Cement, Madras Cement, J K Cements, Century Textiles and industry association CMA — challenging CCI’s Rs 6,307 crore penalty imposed on them in June, 2012.