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| Biggies refuse to cough up Rs 7 billion |
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Business sectors term fine an act of harassment
Wednesday, March 10, 2010
By Rauf Klasra
ISLAMABAD: The top guns of the PPP government have made a confession before the National Assembly Secretariat about their failure to recover a mind boggling Rs 7 billion in fines and penalties from eight powerful cartels after 50 sugar barons, 20 cement tycoons, eight banks, five cellular phone companies, energy tycoons and stock exchanges of Karachi, Lahore and Islamabad got stay orders from the courts to block payments of billions since 2007-8.
The report said it was difficult to determine the exact number of cartels functioning in the country because cartels or collusive agents by nature and compulsion were secretive in their activities.
Since its inception in 2007, the Competition Commission of Pakistan (CCP) had been successful in detect eight cartels, evidence of conspiracy and behaviour of cartel members by conducting thorough forensic investigations. This also involved gathering information about the market and behaviour of the market participation from the stakeholders i.e. the manufacturers, dealers and consumers.
First, eight banks were adjudged guilty of cartelisation with respect to saving accounts. The customers were, therefore, deprived of competitive returns on their savings. A fine of Rs 205 million was imposed on these banks.
The CCP penalised cement industry and imposed fine of Rs 6.3 billion. The cement companies were found involved in cartelisation. The general public could not get commodity at the competitive price.
The CCP also passed orders against three stock exchanges after reports of massive scams there. The action was taken after determining anti-competitive effects of circulars/notices issued by stock exchanges for fixing a price floor for securities and so, these exchanges were imposed penalty of Rs 9 million.
The CCP took action against five cellular mobile companies allegedly found involved in price fixing for various services. Energy companies were imposed a penalty of Rs 40 million by the CCP. The report said that the show cause notices were also issued to 50 sugar barons after sugar price crisis.
Talking to The News, Chairman Cement Association Pakistan Asmatullah Niazi confirmed that the CCP had imposed a heavy fine of Rs 6.3 billion on all the cement units which were accused of cartelisation and the case was pending with the Supreme Court of Pakistan for the last five months.
He said different cement units had hired the services of top lawyers like Athar Minhallah (once the spokesman of CJ Iftikhar Mohammad Chaudhry), Makhdoom Ali Khan and others to defend their cases in the SC.
But, Niazi rejected the allegation on which the cement units were penalised, arguing that it was a sort of harassment and many units had already been closed down and more would meet the same fate if the heavy penalties continued to be imposed. He accused the officials of CCP of performing the role of prosecutors and judges at the same time, who were not ready to listen to their grievances and issues at hand.
This correspondent made several calls to Chairman Pakistan Sugar Mills Association Sikandar Khan but he refused to take the phone calls.
The CCP Chairman, Khalid Mirza, confirmed imposition of Rs 7 billion fine on different sectors of the economy on charges of monopoly and working against the interests of the common man.
He strongly defended the decisions of the CCP by saying that all the decisions to impose penalties were taken after doing comprehensive research, evidences and investigations. He also confirmed that all the parties, which were subjected to fine had got stay orders either from the Supreme Court or the higher courts and so far no recovery was made. But, Mirza said, “We have to appreciate the fact that this was the role of the higher judiciary to evaluate our decisions to regulate the economy and break the cartels in the country.”
He said these cartels were very powerful and enjoyed huge clout and it was not easy to handle them. But, Mirza said, since he took over the charge, he along with his team had tried his best to provide a level playing field so as to protect the interests of all the stakeholders.
But, Mirza regretted that recently the National Assembly approved a law, which had even given powers to the high courts to grant stay and to hear the cases related to the CCP. He said, in the past, these powers were exclusively available to the SC and decisions were expected more quickly.
He said the CCP had already moved the Supreme Court to keep the powers with SC to hear the appeals against the CCP decision. He rejected the allegations that CCP was harassing any sector of the economy. He said cement units were penalised on the basis of one document obtained from the head office of these units. He said the CCP still could not impose heavy fines on the pattern of Europeans countries where 30 per cent fine was allowed against only 7 per cent in Pakistan.
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ISSN 1563-9479 
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