In a significant escalation of its ongoing investigation, the Competition Commission of India (CCI) has taken a decisive step that puts senior corporate executives directly in the line of fire. The antitrust watchdog has invoked a powerful legal provision that extends liability for alleged violations to the individuals in charge of company operations, not just the companies themselves.
Personal Accountability and Steep Penalties for Executives
The commission has invoked Section 48 of the Competition Act, a provision that allows it to hold senior management personally accountable for contraventions of the law. If the ongoing investigation proves violations, the individuals deemed responsible could face severe financial consequences. The law permits the CCI to impose penalties of up to 10% of their average income over the preceding three financial years.
This move marks a strategic shift towards ensuring greater accountability at the highest levels of corporate leadership. It signals that regulators are looking beyond corporate entities to the decision-makers who oversee day-to-day operations, aiming to deter anti-competitive practices more effectively.
CCI's Directives to 31 Steel Companies Under Scrutiny
The action comes as part of a probe into alleged anti-competitive conduct within the steel industry. Based on the findings of an investigation conducted by its Director General (DG), the CCI has issued a formal order to 31 named steel companies.
These firms have been directed to submit a comprehensive set of financial documents for a prolonged period. The order mandates the submission of audited financial statements from the financial year 2015-16 through 2022-23. This eight-year window is critical for building a detailed picture of the companies' financial activities during the period under investigation.
The required documents include:
- Balance Sheets
- Income and Expenditure Accounts
- Profit & Loss Accounts
Furthermore, the companies must provide certified details of turnover specifically linked to the alleged violations. This granular data is a key component in the CCI's process for assessing the gravity of any infringement and, subsequently, calculating the quantum of potential penalties.
Investigation Proceeds Amid Corporate Silence
The probe continues to advance as the regulator gathers evidence. Last week, attempts were made to seek official responses from several of the companies under investigation. Questionnaires were sent out to solicit their side of the story. However, the concerned companies did not respond to the queries, choosing to remain silent on the allegations at this stage.
The invocation of Section 48, combined with the demand for extensive financial records, underscores the seriousness with which the CCI is treating this case. It places significant pressure on both the corporate entities and their leadership to cooperate fully with the investigation. The outcome could set a major precedent for how personal liability is enforced in competition law cases in India, potentially changing the risk calculus for senior executives across industries.
