Cement cartel case hearing to resume soon

The Competition Appellate Tribunal (CAT) has imposed a penalty of Rs10,000 on cement companies seeking adjournment in the hearing of a 2009 case.

CAT has now fixed April 24 for hearing appeals filed by cement manufacturers against a 2009 decision by the Competition Commission of Pakistan (CCP), which imposed a cumulative fine of Rs6.35 billion on 20 cement companies for alleged price fixing and cartelisation. As the tribunal has now become functional following recent appointments, the appeal hearing filed by the cement companies has resumed.

However, in a recent hearing, the senior counsel representing several manufacturers remained absent and the tribunal considered it as a deliberate attempt to delay the proceedings.

The original CCP order was issued in 2009 after an investigation into suspected collusion in the cement sector revealed that the manufacturers had engaged in cartel-like behaviour by fixing prices and monitoring cement dispatches to control market supply.

The evidence included a seven-month record of dispatches recovered from the premises of the All Pakistan Cement Manufacturers Association (APCMA), which pointed towards coordinated activities among the companies.

The CCP imposed fines on individual companies ranging from Rs12 million to Rs1.27 billion, including Rs1.27 billion on Lucky Cement and Rs933 million on DG Khan Cement. Others included Maple Leaf Cement Rs586 million, Bestway Cement Rs562 million, Pakistan Cement Rs405 million, Attock Cement Rs374 million, Pioneer Cement Rs366 million, Dewan (merged entity) Rs345 million, Fauji Cement and Cherat Cement Rs266 million each, Askari Cement (Wah) Rs233 million, Askari Cement (Nizampur) Rs187 million, Fecto Cement Rs174 million, Kohat Cement Rs103 million, Al Abbas Rs87 million, Mustehkam Cement Rs74 million, Dandot Cement Rs42 million, Gharibwal Cement Rs39 million, Dadabhoy Cement Rs28 million and Rs12 million on Flying Cement.

Following the imposition of these fines, several companies obtained stay orders from courts and some approached the Supreme Court directly.

In June 2017, the apex court ruled that the matter should first be adjudicated by CAT, in accordance with the law, which requires the tribunal to decide such cases within six months.