India’s competition regulator is examining allegations that Tata Motors and two finance firms of its US$100 billion parent group abused their market position while selling commercial vehicles, according to three sources and legal documents seen by Reuters.
The Competition Commission of India (CCI) is reviewing a complaint which alleges the country’s biggest seller of trucks dictated terms around the quantity and type of vehicles its former dealer in northern India – Varanasi Auto Sales – should stock.
More than a dozen lawyers representing the three Tata companies attended a private hearing at the CCI in January and argued there was no malpractice by the group’s firms, said the three sources, who have direct knowledge of the matter.
The Tata Group has faced antitrust reviews in the past. A CCI investigation last year found units of Tata Steel and other firms colluded on prices of bearings. A final ruling on that case is pending.
The latest complaint, filed last year by a family member of the dealer, alleged Tata Motors broke rules by working in concert with Tata Motors Finance and Tata Capital Financial Services while advancing dealer credit.
The automaker would stop supplying vehicles to the dealer if repayment of loans advanced by the two finance firms was delayed, indicating they were colluding, said one of the sources privy to the complaint.
“(The) model of business adopted by Tata Group helped in sustaining and retaining the market share,” the complaint document stated.
Full Content: Business Standard
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