Avoiding huge penalty: cement companies told to use sec 39 leniency provisions

The Competition Commission of Pakistan (CCP) has advised the cement manufacturers to use leniency provisions of section 39 of the Competition Ordinance 2007 for avoiding huge penalty by disclosing information of cartelization within the cement sector.
Sources told Business Recorder on Thursday that the cement manufactures should seriously think to utilise liberal concessions under section 39 of the Ordinance to avoid penalty. The units should voluntarily come forward to avail the facility. Under section 39 (leniency), the first company who would come to the commission for disclosure of information would be given 100 percent waiver from penalty.
If a company is ready to give information on cartel, it could avail total exemption from penalty. Subsequently, the companies, who would come to the commission at the later stage could also avail penalty waiver to some extend. But, 100 percent waiver would only be available to the company that comes first. The evidence obtained by the commission has revealed that the units were operating like cartel for the last many years, which might lead to imposition of huge penalty.
Therefore, commission has the authority to impose maximum penalty on the cement units on completion of hearing. To avoid this situation, the cement manufactures should consider section 39 of the Ordinance. The collective hearing of the cases of cement manufacturers would be convened on December 5, 2008. In view of seriousness of the case, the hearing is likely to be chaired by commission's chairman.
The commission had postponed hearing till December 5, 2008 against the cartelization of the cement manufacturers, allegedly involved in price hike of the commodity. Islamabad High Court (IHC) had given stay order against the show cause notices issued to the cement manufacturers. The IHC has directed the CCP to collectively hear the cases of all cement manufacturers at one place ie Islamabad on December 5.
Now the CCP would collectively hear cases of cement manufacturers at Islamabad. However, the commission has been barred from passing any adverse order against the units till finalisation of case by the IHC. Sources said that the Pakistan Banks Association (PBA) has filed an appeal with the CCP against the imposition of the penalty on the banks.
Sources said that the Sindh High Court has vacated the stay order of the PBA, and directed the banks to file appeal with the appellate bench of the commission. Subsequently, 10 banks have filed their individual appeals before the commission. The CCP would subsequently constitute the bench for hearing of the banks' case.
About the current trend of companies to approach courts against the CCP, sources said that the companies have the right to go to the courts as per law. However, courts have vacated stay orders of undertakings in two major cases including banks.
The companies should realise that they should take the CCP very seriously, as these companies have to ultimately face proceedings as per law. Responding to a query, he said that the commission is not against any specific sector. However, the commission would complete investigation in fair, judicious and reasonable manner wherever required.