The
Competition Commission of India (CCI) has in its latest order imposed a penalty
of Rs 17.07 crore (Rs 17,07,31,443/-) on Japan based JTEKT/ JSAI ,
manufacturers of power steering for automobile manufacturers In India with
respect to cartelisation in relation to supply of electric power steering.
CCI is a body established by the Central
Government to eliminate practices having adverse effect on competition, promote
and sustain competition, protect the interests of consumers and ensure freedom
of trade in the markets of India,
According
to a latest release from the Press Information Bureau of the Government of
India, CCI has passed a final order with
respect to cartelisation amongst NSK Limited, Japan (NSK)and JTEKT Corporation,
Japan (JTEKT)and their Indian subsidiaries namely Rane NSK Steering Systems
Ltd. (RNSS) and JTEKT Sona Automotive India Limited (JSAI)respectively in
relation to the supply of Electric Power Steering (EPS) Systems to three
automotive Original Equipment Manufacturers (OEMs), by means of directly or
indirectly determining price, allocating markets, coordinating bid response and
manipulating the bidding process in Request for Information/ Request for
Quotations (‘RFIs/ RFQs’) issued by these three automobile OEMs. The duration
of the cartel was found to be from 2005 to 25.07.2011.
It
may be recalled that the Sona Group had a few years back disposed of its entire
equity holding of around 25.12 per cent in its then flagship company Sono Koyo
Steering Systems for around Rs 419 crore to its Japanese partner JTEKT Corp. Meanwhile,
in a communication dated February 2, 2018 to the Bombay Stock Exchange, Sona
Koyo Steering Systems stated that the company’s management has proposed to
change the name of “Sona Koyo Steering Systems” to “JTEKT India Ltd”.
The
CCI release stated that In view of the fact that NSK/ RNSS was the first to
approach the Commission as a Lesser Penalty applicant and had provided
complete, true and full disclosures, 100 percent reduction in penalty was
granted to NSK/ RNSS and its individuals and the penalty to be paid by them is
nil.
“Further,
in view of the fact that JTEKT/ JSAI was the second to approach the Commission
as a Lesser Penalty applicant and had provided significant value addition in
the matter, 50 percent reduction in penalty was granted to JTEKT/ JSAI and its
individuals. Therefore, the total penalty to be paid by JTEKT/ JSAI is INR
17,07,31,443/-“, the release stated.
The
case was initiated on the basis of an application received by the CCI under
Section 46 of the Competition Act, 2002 (the ‘Act’) read with Competition
Commission of India (Lesser Penalty) Regulations, 2009 (‘LPR’), from NSK/ RNSS.
Thereafter, during the pendency of investigation, JTEKT/ JSAI also approached
the CCI by filing an application under the Section 46 of the Act read with the
LPR.
The
evidence collected in the case included instances of meetings and telephonic
exchanges in which commercially sensitive information about prices etc. was
discussed. Such conduct of the parties was found to have caused appreciable
adverse effect on competition in India. Accordingly, the CCI concluded that NSK
and JTEKT, and their Indian subsidiaries RNSS and JSAI respectively, indulged
into anti-competitive conduct in contravention of the provisions of Section
3(3)(a) read with Section 3(1) of the Act.
Considering
all the relevant factors, penalty, in terms of the proviso to Section 27 (b) of
the Act, was computed for each party, from the date of enforcement of the
provisions of Section 3 of the Act i.e. 20.05.2009 till 25.07.2011.
In
terms thereof, the penalty to be imposed upon NSK/RNSSwas computed at the rate
of 4% of the relevant turnover of RNSS and upon JTEKT/JSAI,at the rate of 1
time of the relevant profit of JSAI. Also, considering the totality of facts
and circumstances of the case, penalty, in terms of Section 27 (b) of the Act,
to be imposed on the individuals of NSK and JTEKT, held liable under Section 48
of the Act, was computed at the rate of 10 percent of the average of their
income for the preceding three years.