BUSINESS

Muthoot Finance for “forum shopping” via the CCI lens

It has been reported that Muthoot Finance engaged in forum shopping and misrepresented facts in a complaint filed with the Competition Commission of India (CCI). The complaint is against Muthoot Finance accusing debenture trustees of abusing their market dominance by charging exorbitant fees to enable the issue of non-convertible debentures (NCDs). The complaint was filed with the antitrust authority in 2021.

Upon conducting an investigation, the CCI discovered that Muthoot had previously filed a similar complaint with the Securities and Exchange Board of India (SEBI), but had neglected to notify the CCI of this additional complaint. The basic rules of the CCI specify the complaint format and prohibit corporations from include just certain material in their complaints.

Muthoot Group did not respond to an email addressed to them.

The case is still pending with the commission about this matter, according to a CCI source. He did, however, note that there is still a lack of judicial clarity on the right regulator to handle a complaint involving regulatory overlap. However, the CCI often stays out of the way if there is overlap with the sectoral regulator. However, the CCI steps in if a specific problem is unreported by any authority and there is a breach of competition regulations, according to the source.

According to specialists in competition law, companies that knowingly withhold information from the CCI usually face harsh penalties.

“Parties are required to declare any existing conflicts and parallel litigations in other courts or agencies as a result of a 2019 modification. The CCI has seldom used this clause, but it seems that it now takes such omission seriously since it has raised the penalty for guilty firms from Rs 10 lakh to Rs 1 crore. M.M. Sharma, Head of Competition Law at Vaish Associates, said as much.

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