India's antitrust regulator is investigating JK Tyre & Industries Ltd after a State Govt accused the company of bid-rigging, & the inquiry has been expanded to other firms, according to sources & legal filings seen by Reuters. The Competition Commission of India (CCI) in 2019, ordered an inquiry after the northern state of Haryana said JK Tyre employed unfair trade practices while bidding to supply tyres for public transport vehicles, a Court filing showed.

The case details & CCI's initial assessment were contained in a September 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 & the CCI doesn't 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 & quoted high prices.

The watchdog in Nov ordered a probe saying "non-participation by other tyre manufacturers" was suggestive of a "concerted act to rig the bid".

A JK Tyre spokesman refused to comment "as the matter is currently subjudice." In August this year, the CCI decided the role of other tyre firms should be examined & expanded its scrutiny to include Apollo Tyres, CEAT, MRF, & the Indian units of France's Michelin & Germany's Continental AG, 2 sources familiar with the case said.

It wasn't immediately clear whether the CCI has approached those tyre firms with inquiries. The sources declined to be identified as details of the probe were confidential. The CCI & the Haryana Govt didn't respond to requests for comments. MRF, Michelin & Continental also didn't respond to requests for comments, while CEAT & Apollo declined to comment.

A finding of bid-rigging could lead to a potential fine of up to three times the profit in each year prices were fixed by the companies, or 10 per cent of annual revenue, whichever is higher. JK Tyre, which has a market value of $190 million, says it accounts for 30-36% of the market for different types of tyre variants that is worth some $9 billion annually.

"EMAIL DUMPS"

Haryana state has alleged JK Tyre was the sole bidder in the tender in 2018 & its prices were around 34 per cent higher than previous purchase rates, the documents show. "There appears to be some arrangement or understanding amongst the tyre manufacturers ... The matter warrants a thorough & detailed investigation to unearth the entire modus operandi resorted to," the CCI's Nov. 2019 order said.

As part of the probe, the CCI this year sought "email dumps" over five years belonging to some senior executives in the JK group, saying they were essential for the investigation. JK Tyre has challenged that demand at the Punjab and Haryana High Court, saying it was cooperating with the investigation & 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 & whimsical manner", JK Tyre said in the Sept. 19 filing. The Court will next hear the case on Oct. 28. 

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Picture Source : <a href="https://commons.wikimedia.org/wiki/File:Tyres_On_Sale_In_A_Tyre_Shop.jpg">Collins Musonda</a>, <a href="https://creativecommons.org/licenses/by-sa/4.0">CC BY-SA 4.0</a>, via Wikimedia Commons