Will formulate transparent penalty system soon: CCI

Cracking the whip on DLF and the BCCI, probing cartelisation among oil marketing companies and clearing high-profile M&A deals - the past few months have been eventful at the Competition Commission Of India (CCI). CCI chairman Ashok Chawla discusses, on CNBC-TV18, some of the key decisions taken by the watchdog and adds that the commission has decided to establish a system to ensure a transparent set of guidelines and penalties.

Below is the edited transcript of the interview on CNBC-TV18

Q: The United Spirits Limited (USL)-Diageo deal, which has received the final observation from the Securities and Exchange Board of India (SEBI) awaits the nod from the Competition Commission of India (CCI). Can you give an update on the status of the USL-Diageo deal?

A: Today was the last date for the receipt of replies from USL and Diageo to queries raised by the CCI. I don't think after that it should take us very long to arrive at a decision.

Q: Where do you stand on the issue of cartelisation as far as oil marketing companies are concerned? The sector continues to be regulated by the government which has allowed a degree of freedom in pricing. But where really does the question of caretlisation arise if the OMCs don't even have the freedom to price?

A: We asked this question to the government sometime ago. The ministry of petroleum replied that it has no role to play regarding the pricing of petrol and it is decided by the oil companies. So, we are to issue an order calling for a probe to investigate if oil companies are forming a cartel to maintain similar prices for similar amounts of petrol.

Regarding diesel, the government has admitted that it has not fully deregulated the pricing. And this requires decision at the levels of the government and our advocacy efforts are on. However, the policy is not fully open and transparent.

Q: When will you issue that order?

A: The commission has already decided and is in the process of finalising an order which should be issued in a few days.

Q: The CCI has established the abuse of position and grave conflict of interest at the Board Of Control For Cricket In India (BCCI). Why did the CCI impose a penalty of only 6 percent and not the permissible limit of 10 percent?

A: I think the order and penalty of 6 percent indicates the significance of BCCI's contribution towards the development of cricket.

Q: There have been allegations that there was a lack of transparency in the process of how the BCCI's penalty was arrived at. What is your opinion?

A: We have taken a conscious decision to build on some more cases before establishing an architecture that will ensure transparency in the broad principles or guidelines for imposition of penalty.

Q: In response to the buyer guidelines issued after the DLF order, the DLF buyers-association has filed yet another complaint with the CCI which you have declined to address. What do these guidelines really mean and do they amount to anything at all?

A: Technically and legally, that was in relation to a specific case of DLF found to be abusing its dominance and the penalty was imposed accordingly. Later the agreement was modified and a separate order was issued in January.

Now that order is under litigation. I have mentioned separately and in the public domain, that while this is an agreement which will have to go through the process of judicial appraisal and final approval, it is fair and balanced and an agreement which builders, developers and consumers would do well to follow.