MCA starts showing its teeth

The Monopoly Control Authority (MCA), under its new Chairman Khalid A Mirza, has started showing its teeth and started taking action against misdoings by any company. The MCA heard three important cases in Karachi on October 30 and 31 and passed order seeking more information to scrutinise if the company had indulged in any wrongdoing.
The Authority comprised the Chairman, Member MCA Raza Arshad, Chief Cost Accounts Officer Javed Qaiser and Joint Registrar Muhammad Ajaib Khan. In the case of a non-competition agreement by Unilever Pakistan Ltd and Dalda Foods (Pvt) Ltd, the MCA has demanded full information regarding the deal, particularly the copy of annual report and audited accounts for the year ended on December 31, 2004 and a copy of audited accounts of vanaspati ghee and oil business for the sale of Unilever's Dalda and Planta business to Dalda Food (Pvt) Ltd.
A press release issued by MCA said that in the matter of transfer of business and execution of Non-Competition Agreement by Unilever Pakistan Ltd and Dalda Foods (Pvt) Ltd, the representatives of the undertakings appeared before the MCA and argued the case. The representatives of the undertakings submitted that the Agreement had substantially increased the efficiency, which would not have otherwise been achieved.
The MCA asked them to provide substantive evidence, which they promised to provide within a week's time, and also directed them to submit the following information/documents by November 6, 2006.
The documents comprise: a copy of information Memorandum; a copy of the Non Binding Bid submitted to Dalda Foods (Pvt) Limited for purchase of Dalda and Planta business of Unilever Pakistan Ltd; substantive evidence that the Non-competition Agreement, increased the efficiency, which could not have otherwise been achieved; and a copy of annual report and audited accounts for the year ended on December 31, 2004, including a copy of specially prepared audited accounts of vanaspati ghee and oil business for the purpose of sale of the said business.
It further stated that it would consider the information and thereafter pass an Order. In the other two cases, Amros Pharmaceuticals did not supply information to MCA despite its order of August 29, 2006. The MCA imposed penalty of Rs 100,000, which the company was to deposit under the relevant head of account and also to supply the requisite information within fifteen days from the date of receipt of that Order.
The undertaking failed to deposit the penalty and also to supply the requisite information within the given timeframe. MCA therefore served a hearing notice for providing it an opportunity to explain the reasons for non-compliance to its Order before taking action under Section 19(2) of the MRTPO 1970.
According to the release, the representative of the undertaking appeared before the Authority on October 31, 2006 who apologised and also gave a commitment for depositing the penalty under the relevant head of account and also to provide the requisite information within three days.
The Authority said that it would pass Order on receipt of paid challan of the penalty and the information to be supplied by the undertaking. Regarding the third case, the Authority heard the representative of Descon Cotton Mills Ltd in the matter of non-supply of information by the undertaking. The representative argued the case and submitted that the undertaking could not supply the requisite information in time because its computer system was down. He also regretted the delay in submission of the information.
In the light of the above, the MCA considered that the undertaking did not supply the information, even after receipt of its reminder, and supplied the information on receipt of a Show-Cause Notice. Since the undertaking did not appear before the MCA with clean hands, an Order will be passed against it as provided under the law.