CCI imposes Rs 9.7 mn fine on 4 firms in a case related to tenders of PMC

The Competition Commission has imposed a penalty of nearly Rs 9.7 million on four firms and some of their senior officials for rigging the bids with respect to tenders floated by Pune Municipal Corporation (PMC).

Invoking the leniency provisions, the fair trade regulator also reduced the penalty on one of the firms and its official.

The four firms are Saara Traders, Ecoman Enviro Solutions, Fortified Security Solutions and Raghunath Industry.

In an order dated May 31, the Competition Commission of India (CCI) said that the four firms have "entered into an arrangement to rig the bids" pertaining to tender numbers 21 and 28 of 2013 floated by PMC.

The tenders pertained to design, supply, installation, commissioning, operation and maintenance of municipal organic and inorganic solid waste processing plants.

The firms are responsible for infringement of Section 3 of the Competition Act, CCI added.

Section 3 pertains to anti-competitive agreements.

As per the order, the fair trade regulator had slapped a fine of Rs 4.645 million on Saara, Rs 3.3 million on Ecoman and Rs 1.1 million on Fortified. A penalty of Rs 2.64 million was also imposed on Raghunath Industry.

Besides, a total fine of Rs 372,000 was levied on four officials belonging to Saara, Ecoman and Raghunath.

While the penalties on the firms were at the rate of 10 per cent of their average turnover for the years 2011-12, 2012-13 and 2013-14, in case of officials the fines were at the rate of 10 per cent of their average income for the same three years.

During investigation, all the four firms had approached CCI seeking lesser penalties.

"Keeping in view the modus operandi of the cartel, the stage at which the lesser penalty application was filed, the evidences gathered by the DG independent of lesser penalty application and co-operation extended in conjunction with the value addition provided in establishing the existence of cartel, CCI granted 50 per cent reduction in penalty to Saara and its individual (official) than otherwise leviable," an official release said.

Pursuant to the reduction, the penalty imposed on Saara came to Rs 2.322 million and Rs 74,513 on its official.

The firms have to pay a total fine of Rs 9.364 million and the officials Rs 297,000.

According to the order, CCI's investigation arm -- the Director General (DG) -- while investigating another case had come across evidence of possible cartelisation in tender number 21 and 28 of 2013 of PMC.

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