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Business Recorder
a day ago
- Business
- Business Recorder
Protection of consumer interests: A robust framework is a must, Aurangzeb tells CCP
ISLAMABAD: Federal Minister for Finance Muhammad Aurangzeb conveyed to the Competition Commission of Pakistan (CCP) a robust competition framework is essential for protecting consumer interests, ensuring market transparency and sustaining economic growth. Federal Minister for Finance Aurangzeb was given a comprehensive briefing by the CCP on the challenges related to promoting competition in the sugar sector and the causes of the recent sugar crisis. The meeting was attended by Adviser to the Finance Minister Khurram Shehzad, Chairman CCP Dr. Kabir Ahmed Sidhu, Registrar CCP Shehzad Hussain, Legal Adviser Hafiz Naeem, and Director Cartel and Trade Abuse Salman Zafar, along with other senior officials. During the briefing, Dr Kabir Ahmed Sidhu informed the finance minister that CCP is preparing detailed recommendations to assist the Sugar Sector Reform Committee. Sugar crisis: Finance minister Aurangzeb, CCP chairman Sidhu discuss ways to stabilise market He also apprised the minister of the causes of previous sugar crises in 2008-09, 2015-16, and 2019-20, and shared the Commission's findings and enforcement actions against cartelisation in the sector. The finance minister was informed that the CCP's 2021 order against the sugar cartel had been remanded by the Competition Appellate Tribunal to CCP for a rehearing, and that the commission has formulated a comprehensive strategy for its expeditious disposal. Aurangzeb assured full government support to the CCP for expediting court proceedings of pending cases and enhancing the institution's operational capacity. He reaffirmed that a robust competition framework is essential for protecting consumer interests, ensuring market transparency, and sustaining economic growth. The meeting also reviewed pending litigation, examined administrative and regulatory measures to stabilise the sugar market, and discussed proposals to strengthen CCP's institutional capacity to promote economic efficiency, protect consumers, and ensure a transparent, competitive business environment. Copyright Business Recorder, 2025
Express Tribune
06-08-2025
- Business
- Express Tribune
PTCL fails to address CCP concerns over Telenor merger
Listen to article Pakistan Telecommunication Company Limited (PTCL) has failed to adequately respond to key questions raised by the Competition Commission of Pakistan (CCP), a mandatory prerequisite before it can secure regulatory approval for its planned merger with Telenor Pakistan. During a public hearing conducted on Tuesday conducted by CCP, PTCL's management was unable to provide clarity on various financial, regulatory, and strategic aspects of the proposed transaction, including a dubious $1 billion investment plan. Sources told The Express Tribune that the CCP raised three core concerns during the session. The first question related to the proposed business plan worth $1 billion. PTCL and its subsidiary Ufone are both currently operating at a loss, while Telenor's financial condition also remains weak. The CCP raised a fundamental question, given that PTCL had arranged a loan to acquire Telenor in the first place, how is it planning to arrange financing worth $1 billion after the merger takes place? Further doubts were cast over the absence of any investment timeline in PTCL's proposed business plan. This omission raised serious concerns over the plan's feasibility and credibility. PTCL claims that Ufone will expand its network and tower infrastructure after the merger, but the CCP pointed out that a larger network alone does not guarantee profitability. It further questioned what PTCL intends to do with the acquired towers and whether it was considering selling them, use them to raise capital, or integrate them operationally. In addition, regulatory accounting issues also came under scrutiny. The CCP said that PTCL must submit the consolidated regulatory accounts for both Ufone and Telenor to the Securities and Exchange Commission of Pakistan (SECP) post-acquisition. PTCL failed to offer satisfactory answers during the hearing and has requested more time to prepare a comprehensive response. According to a CCP statement, the hearing was part of proceedings under Section 11(6) of the Competition Act, 2010. PTCL's senior management appeared before the CCP bench and presented a detailed overview of its claimed efficiencies, regulatory filings, and proposed structure for acquiring 100% shareholding in Telenor Pakistan (Private) Limited and Orion Towers (Private) Limited. The CCP bench, comprising of CCP Chairman Dr Kabir Ahmed Sidhu, Member Salman Amin, and Member Abdul Rashid Sheikh, posed several probing questions to assess the merger's broader implications on competition and consumer welfare. PTCL has long been providing cross-subsidies to Ufone, but the government now seeks to scrutinise Ufone's accounts before approving the proposed merger plan. Ufone's financial losses were absorbed by PTCL, which in turn prevented the parent company from distributing dividends to its shareholders. Despite this, Ufone's management and board of directors continued to enjoy full perks and privileges. Although government nominees have held seats on Ufone's board, they have never questioned the persistent losses. The country's anti-trust watchdog has also asked PTCL to submit Ufone's financial accounts. While Ufone did comply, the submitted records were reportedly too complex to evaluate effectively.
Business Recorder
31-07-2025
- Business
- Business Recorder
CCP successfully clears backlog of pending cases by over 40pc
ISLAMABAD: The Competition Commission of Pakistan (CCP) has successfully cleared backlog of pending cases by over 40 percent since assumption of charge of CCP Chairman by Dr Kabir Ahmed Sidhu in August 2023. The CCP has made significant progress in reducing its legal backlog and recovering penalties, marking a major turnaround in the enforcement of competition law. When the new management took charge in August 2023, the CCP faced 567 pending cases across different courts. Through early hearing applications and aggressive follow-up, 223 cases have since been decided, cutting the backlog by more than 40 percent. The biggest relief came in the Competition Appellate Tribunal (CAT), where 121 cases were decided out of 210, bringing down pendency by 58 percent. The Lahore High Court decided 39 cases, reducing backlog by 78 percent, while the Sindh High Court disposed of 40 cases, a 61 percent cut. The Islamabad High Court decided 13 cases, lowering pendency by 43 percent. At the Supreme Court, 11 cases were decided, and 171 cases challenging CCP's mandate have been clubbed for a single hearing. The resolution of cases has enabled the CCP to recover imposed penalties. In the past year alone, the Commission recovered PKR 360 million, surpassing the total PKR 201 million collected since its establishment in 2007. One of the landmark judgments was delivered by the Supreme Court of Pakistan in the Dalda Foods vs CCP case, which strengthened the CCP's enforcement capacity. The apex court unanimously upheld the Commission's statutory powers to gather information and conduct inquiries under Section 36 of the Competition Act, 2010. The Court ruled that companies are bound to comply with CCP directives and that the Commission is not required to provide detailed reasoning before launching an inquiry. Similarly, in a case on alleged cartelization in the poultry sector, the Lahore High Court upheld CCP's authority to pursue investigations into price-fixing. Justice Jawad Hassan stressed that show-cause notices cannot be prematurely challenged in High Courts and must first go through CCP's adjudication process, reaffirming the regulator's autonomy. A major breakthrough that helped the swift resolution of cases was the revival of the Competition Appellate Tribunal, after the appointment of Justice Sajjad Ali Shah as Chairman with members Dr Faiz Elahi Memon and Asim Akram. The tribunal has disposed of 121 cases, leaving only 89 pending, and delivered rulings that have both reduced penalties and clarified key points of law. Notable decisions by CAT include upholding fines on Reckitt Benckiser (Strepsils), PVMA, ICAP, and British Lyceum, while reducing penalties on PREMA Milk, Diamond Paints, 3N Lifemed, and Pakistan Steel Mills. In the high-profile Sugar Mills cartel case involving Rs 44 billion, the tribunal remanded the matter back to CCP, ruling that the Chair's casting vote was invalid. Copyright Business Recorder, 2025
Express Tribune
04-06-2025
- Business
- Express Tribune
Fertiliser firms fined for price fixing
Listen to article The Competition Commission of Pakistan (CCP) has cracked down on alleged collusion in the fertiliser sector, imposing Rs375 million in penalties for creating a monopoly and extracting billions from farmers. In response, the Fertiliser Manufacturers of Pakistan Advisory Council (FMPAC) has announced it will challenge the CCP order in court. Interestingly, these fertiliser barons had previously refused to pay multi-billion rupee dues on account of the Gas Infrastructure Development Cess (GIDC), instead obtaining stay orders from the courts. They had collected billions from farmers but failed to deposit these funds in the national exchequer — a matter that remains unresolved. The CCP, a watchdog for anti-competitive practices, launched a suo motu inquiry and imposed a penalty of Rs50 million on each of the six major urea manufacturers, along with a Rs75 million fine on FMPAC, totalling Rs375 million. The penalised companies include Fatima Fertiliser Limited, Fauji Fertiliser Company Limited, Fauji Fertiliser Bin Qasim Limited, Fatima Fertiliser Company Limited, Engro Fertiliser Company Limited, and Agritech Limited. According to the CCP's findings, these firms, in coordination with their trade association FMPAC, ran an 'awareness campaign' that effectively amounted to fixing urea prices nationwide. The Bench, comprising Dr Kabir Ahmed Sidhu and Salam Amin, concluded that this activity violated Section 4 of the Competition Act, 2010. While the manufacturers claimed to be setting prices independently, they failed to justify the remarkably synchronised pricing strategy. The CCP investigation revealed that the practice distorted competition and harmed farmers — particularly during the critical Rabi and Kharif seasons — by artificially inflating fertiliser prices and limiting market choices. The companies' attempt to shield themselves under the 'state action doctrine' was also dismissed. The CCP Bench found no formal government directive, or compulsion, to justify their collusive behaviour. Instead, the firms exploited a government instruction about raising awareness among farmers regarding urea prices. They used this as cover to jointly announce uniform urea prices across the country. The bench held that such "actions, taken under the pretext of complying with government instructions, effectively undermined market dynamics and distorted competitive pricing mechanisms." The CCP expressed concern that despite differences in input costs, economies of scale, market size, and gas prices, all six companies were selling a urea bag for the identical price of Rs1,768. The bench remarked that in a market where each company's production capacity and market share are publicly known, such coordinated disclosures cannot be viewed as incidental or competitively benign. Rather, the joint announcement amounted to overt collusion. Repeated directives from the Fertiliser Review Committee (FRC) also went unheeded, with companies failing to address supply imbalances. Notably, the CCP had earlier warned fertiliser manufacturers and FMPAC in 2010, 2012, and 2014warnings that did not lead to lasting change. The CCP chairman reiterated that trade associations should not serve as platforms for sharing price-sensitive information or coordinating pricing strategies. The Commission reaffirmed its commitment to ensuring competitive markets, protecting consumer welfare, and holding violators accountable. In response to the CCP's order, FMPAC issued a statement asserting it had no role in pricing decisions. It clarified that it does not determine or coordinate the pricing of urea or any other fertiliser product. As a non-commercial advisory body, FMPAC claimed it has never engaged in price-setting activities, and any implication otherwise is factually incorrect. FMPAC stated that the controversial advertisement was published under a formal directive from the federal government, communicated via the Fertiliser Review Committee (FRC). During the FRC's meeting on November 25, 2021 — held amid concerns about urea hoarding and market manipulation — it was resolved to initiate a public awareness campaign. FMPAC was directed to publicise the prevailing market price, which had already been acknowledged during the proceedings. FMPAC insisted that it acted in good faith to implement the government's directive, without involvement in setting or proposing the published price. The intent, it said, was to ensure transparency and protect farmers from exploitative practices — not to distort market dynamics. FMPAC plans to contest the CCP's interpretation and pursue legal remedy through the appropriate appellate forum. The Council expressed confidence that a fair and comprehensive review would confirm its actions were lawful and transparent.
Business Recorder
03-06-2025
- Business
- Business Recorder
CCP imposes Rs375m fines on six major fertilizer makers, FMPAC
ISLAMABAD: In a landmark decision against cartelisation, the Competition Commission of Pakistan (CCP) has imposed fines totaling Rs 375 million on six major fertilizer manufacturers and their trade association, the Fertilizer Manufacturers of Pakistan Advisory Council (FMPAC), for colluding to fix the retail price of urea across the country. The penalties follow a suo motu inquiry launched by the Commission, which concluded that the manufacturers — in coordination with FMPAC — had jointly issued a public advertisement setting the maximum retail price at Rs 1,768 per 50 kg bag. The CCP found that this was not a routine awareness campaign but a coordinated act of cartelization, violating Section 4 of the Competition Act, 2010. The order was issued by a CCP bench comprising Chairman Dr Kabir Ahmed Sidhu and Member Salman Amin. The six companies fined Rs 50 million each include Engro Fertilizers Limited, Fauji Fertilizer Company Limited, Fauji Fertilizer Bin Qasim Limited, Fatima Fertilizer Company Limited, Fatima Fertilizer Limited, and Agritech Limited. Their association, the FMPAC, was fined Rs 75 million, bringing the total penalty to Rs 375 million. The Commission's investigation noted that despite significant differences in gas pricing, economies of scale, and input costs, all companies charged the exact same price — a clear indicator of collusion rather than coincidence. The manufacturers attempted to defend their conduct by invoking the 'state action doctrine,' arguing that they acted under a federal government directive to educate farmers about urea prices. However, the CCP bench found no formal instructions compelling the companies to set a uniform price. Instead, the companies misused the government's communication to justify a cartelised price-fixing strategy. The bench observed that actions taken under the pretext of public interest effectively undermined the forces of supply and demand and distorted competitive pricing mechanisms. The Commission expressed concern that despite repeated warnings issued in 2010, 2012, and 2014 — including findings that two companies had engaged in joint advertising to influence market prices — no long-term corrective measures were taken by the companies or FMPAC. The recurrence of such behavior signaled the ineffectiveness of prior warnings and reinforced the need for stronger enforcement and deeper structural reform. While announcing the order, the CCP reiterated that business associations like FMPAC have no legal authority to set or recommend prices. Their involvement in coordinated pricing decisions undermines market competition and consumer welfare. The Commission warned that any such action — particularly from entities that have long benefited from government subsidies — will not be tolerated. The CCP's order also touched upon broader policy concerns. Pakistan's fertilizer sector, once heavily subsidized to promote local production, continues to operate under the outdated Fertilizer Policy of 2001. That policy had extended 20-year gas supply contracts at concessionary rates to fertilizer plants commissioned after 2001. Although these subsidies expired in July 2021, pricing across companies has remained inexplicably aligned. According to a study by the Pakistan Institute of Development Economics (PIDE), the government has been spending approximately Rs 200 billion annually on fertilizer subsidies — yet the intended benefit has largely failed to reach farmers, who continue to face high prices and supply shortages. The Commission stressed that this uniformity in pricing, even after deregulation and subsidy withdrawal under IMF conditions, raises serious concerns about the lack of true market competition. Despite differences in technology, plant age, and gas costs, the six companies maintained identical prices, suggesting that collusion — not competition — drives pricing in the fertilizer sector. Separately, the Islamabad High Court (IHC) has reserved its verdict in a related case concerning the CCP's direction for fertilizer companies to submit cost audit reports. As part of its investigation, the Commission had required these reports to assess pricing behavior. However, the companies challenged the directive in court, claiming that cost audit data was confidential and could not be disclosed. In response, CCP's legal representative argued that all companies are already required to submit cost audits to the Securities and Exchange Commission of Pakistan (SECP), and questioned why the same data could not be provided to another statutory regulator. The court has now reserved judgment after hearing both sides. It is also worth noting that in a separate case involving Dalda Foods, the Supreme Court of Pakistan upheld the CCP's jurisdiction to seek information, monitor market conduct, and conduct investigations—further reinforcing the Commission's legal mandate. Under the Competition Act, any agreement or practice that fixes prices, limits output, or divides markets is prohibited. Violations may lead to fines of up to 10% of annual turnover or Rs 75 million, whichever is higher. Repeat violations can result in criminal prosecution under Section38 of the Act. The CCP has urged the federal government to comprehensively review the Fertilizer Policy 2001, disengage from price coordination through trade bodies, and let market dynamics—not collusive agreements — govern the industry. The Commission reaffirmed its commitment to promoting open markets, safeguarding consumer interests, and holding violators accountable. To report cartel behavior or anti-competitive practices, members of the public can contact the CCP's Market Intelligence Unit at 0304-0875255 or email [email protected]. Copyright Business Recorder, 2025
