A series of raids that the antitrust watchdog conducted on units of Mumbai-based global commodities traders to seize trade records on Friday and Saturday was part of a sweeping probe into alleged commodities price rigging. About 25 officials of the Competition Commission of India (CCI) searched the offices of Swiss giant Glencore, Africa-based Export Trading Group and an Indian company belonging to the Edelweiss Group that used to previously run a commodities business, according to a Reuters report.
The CCI has been investigating for the past three months allegations that the companies formed a cartel to discuss the import pricing of pulses and sell the commodity in the Indian market at higher prices in 2015 and 2016 when India was facing a severe shortage, sources said. Glencore spokesperson Charles Watenphul declined to comment to Reuters, while Edelweiss, which sold its commodities trading business in November 2016, and the Export Trading Group did not respond to requests for comment.
New Delhi had allowed duty-free import of pulses include chickpeas and black lentils, which are the staple of Indian cuisine, in 2015 after two years of drought pushed up the prices of pulses. "The collusion by these companies led to higher prices of pulses" despite the duty-free imports, the report said citing a government source. A probe whether the companies continued their alleged collusion even after the pulses stabilized in recent years is also within the scope of the investigation, the source said.
The raids of five offices reportedly began on Friday and concluded on Saturday. Antitrust officials have collected evidence, including documents and e-mails, and questioned company officials, the report said, citing another source. An unidentified industry executive told Reuters that CCI's search involved going through company records at Glencore's office in Mumbai, confirming it was part of the watchdog's probe into accusations of price fixing.
A second successive year of drought in 2015 in the pulse-growing heartland meant crops wilted and exacerbated the shortages of food. Protein-rich pulses form an important ingredient of largely vegetarian rural India. The country consumes about 22 million tonnes of pulses annually, and the shortfall in 2015-16 amounted to 7-8 million tonnes.
The CCI raids on commodities traders are only the fourth such search operation in its nearly 10 years of existence. The CCI can conduct a raid only with the prior approval of a judge. In October, the CCI raided the offices of global brewers like Carlsberg and Anheuser Busch InBev and seized e-mails that allegedly showed violations of Indian antitrust laws. However, the brewing companies have pleaded leniency under a CCI programme, the report said.