JK Tyre and Industries Ltd. is under probe after a state government accused the company of being involved in fraudulent actions which resulted in a non-competitive bid. India's antitrust regulator is investigating whether the company was involved or created a fraudulent scheme which resulted in Bid-Rigging.
Last year, the Competition Commission of India (CCI) had ordered a probe after the northern state of Haryana stated that JK Tyre practised unfair trade while bidding to supply tyres for public transport vehicles.
According to an exclusive article by Reuters:
The case details and CCI’s initial assessment were contained in a Sept. 19 state court filing made by JK Tyre contesting some of the watchdog’s demands. The filing, reviewed by Reuters, has not previously been reported and the CCI does not disclose current probes into cartel cases.
According to documents in the filing, Haryana state told the CCI that JK Tyre was the sole bidder in a tender and quoted high prices. The watchdog in November ordered a probe saying “non-participation by other tyre manufacturers” was suggestive of a “concerted act to rig the bid”.
A JK Tyre spokesman declined to comment “as the matter is currently subjudice.”
In August this year, the CCI decided the role of other tyre firms should be examined and expanded its scrutiny to include Apollo Tyres APLO.NS, CEAT CEAT.NS, MRF MRF.NS, and the Indian units of France's Michelin MICP.PA and Germany's Continental AG CONG.DE, two sources familiar with the case said.
Haryana state has alleged that JK Tyre was the sole bidder in the tender in 2018 and its prices were around 34% higher than previous purchase rates, the documents show. The state believes that JK Tyre was involved in 'bid-rigging.'
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“There appears to be some arrangement or understanding amongst the tyre manufacturers. The matter warrants a thorough and detailed investigation to unearth the entire modus operandi resorted to,” the CCI’s Nov. 2019 order said.
JK Tyre has challenged that demand at the High Court of Punjab and Haryana, saying it was cooperating with the investigation and the emails of those executives had limited or no relation to the case.
The watchdog’s probe team was “acting in a completely unreasonable, arbitrary and whimsical manner”, JK Tyre said in the Sept. 19 filing.
The court will next hear the case on Oct. 28.
