Zonal representatives of Pakistan Sugar Mills Association (PSMA) will meet on November 14 to finalise arrangements against the show-cause notice issued by the Competition Commission of Pakistan (CCP) which prima facie constitutes violation of the section 4 of the Competition Commission Ordinance 2007.
Sources told Business Recorder on Friday representatives of Punjab, Sindh and NWFP zones would hold a meeting in Islamabad under the chairmanship of association chairman Iskandar M Khan. They would discuss the show-cause notice issued by CCP against cartelisation of sugar and violation of the Commission Ordinance 2007.
Sources said that the commission had called PSMA to show cause in writing within 14 days of the notice and to appear, or place facts and material in support of its contention, before the commission and to avail the opportunity of being heard through an authorised representative on November 14, 2009 at the office of the commission.
The association has been asked to explain why an appropriate order under clause (b) of section 31 of the ordinance may not be passed or a penalty for the violations was not imposed under section 38 of the ordinance, sources added. "The CCP directed the association for providing the names of the authorised representatives appearing before the commission, the sources said, adding that the notice also mentioned that the CCP may proceed in the matter as provided under the law, if the association fails to appear before commission for the hearing on November 14."
Sources said the CCP issued notice to the association on October 23 on the basis of the relevant record and inquiry report finalised by the commission after conducting raids at different zonal offices. "As per notice, the association decides and attempts to control whosoever enter the relevant market, thereby, prima facie, violating section 4(1) of the Ordinance by restricting competition," sources said.
"The notice said the association engaged in practices, prohibited under the ordinance with the object or effect of preventing, restricting or reducing competition within the sugar industry in Pakistan, relevant market, and it prima facie constitutes violations of sub-section (1) of section 4 and in particular clauses (a), (b), (c) and (e) of sub-section (2) of Section 4 of ordinance," they said.
They said the inquiry report showed that the association appears to have been engaged in deciding and fixing the price of refined sugar and the terms of production and supply of refined sugar in the market, thereby, prima facie, violating section 4(1) read with sections 4(2)(a) and (c) of the ordinance.
The notice further said PSMA appeared to have a prominent role in making policy decisions, ensuring co-ordination and implementing decisions amongst its member sugar mills for fixing price and territorial allocations during sugarcane purchase, which, prima facie, constituted a violation of section 4(1) read with sections 4(2) (a) and (b) of the ordinance, the sources maintained.
The CCP further pointed out that the PSMA had taken decisions, communicated to the member undertakings through its circulars, exhibiting its involvement in collusive bidding, inter alia, by insisting that the member sugar mills offered a uniform price to the TCP for the purpose of sale of refined sugar thereby, prima facie, violating section 4(1) read with section 4(2), (e) of the ordinance. Iskandar confirmed about the scheduled meeting and refused to comment on the issue.
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