The largest passenger car maker of India has been found guilty by industry investigators on account of storing expensive spares and trading them at higher prices. So to compensate this mistake, the MSIL (Maruti Suzuki India Limited) has been asked to pay a fine of Rs.3400 crores. The company will be liable to pay the fine in case the Competition Commission verifies the investigation find outs.
Maruti has been one of the most trusted automobile brands of India. It has been found guilty under the 3(4) and 4 section of competition law. The final verdict on the case will be given on 25th April. Maruti officials refrained from answering any queries about the matter by saying that the issue is quite sensitive and the final decision is yet to come.
Apart from Maruti, 16 other auto majors are being suspected for the same. The detailed report given by the Director General of Investigation stated that Maruti Suzuki had signed an agreement with the spare parts supplier and reselling of these parts clearly breaks the Competition Act law of Section 3(4).
This section clearly states that ‘Any agreement amongst enterprises or persons at different stages or levels of the production chain in different markets, in respect of production, supply, distribution, sale, storage, or price of or trade in provision or goods of services, that includes tie-in agreement, exclusive distribution agreement, exclusive supply agreement and others shall be an agreement in contravention of sub-section 1 if such agreement causes or is likely to cause an appreciable adverse effect on competition in India.’
If the allegations against Maruti Suzuki are proved correct than the company will be liable to pay almost one tenth of their annual income. This final decision would also decide the course of spare parts business in Indian automotive industry.
Source – ET