Market manipulation: Holding companies accountable may not be easy

The Bangladesh Competition Commission (BCC) has run into complications after lodging a number of suo-moto cases against multiple corporate businesses over allegations of consumer market manipulation.

The commission lodged 44 cases in September, all of which are currently under trial, against companies that produce essential commodities such as wheat, flour, poultry, egg and toiletries over price rigging and creating artificial supply shortages in the market. 

Officials of the companies concerned, however, denied the allegations brought against them and sought exemption from the charges, saying the commission took legal action against them based on insufficient data and without solid evidence.

Take for example the case of the Nurjahan Group. 

ACI Pure Flour Limited, a concern of ACI Limited, has been producing and marketing flour for the last six years by renting Nurjahan Group's Tasmin Flour Mills Ltd. 

The BCC filed a case against Nurjahan Group over destabilising the flour market by creating an artificial crisis and hiking prices abnormally even though the group is not involved in any step from production to marketing, according to legal documents obtained by The Business Standard (TBS). 

According to Nurjahan Group's exemption application, ACI Pure Flour Limited rented Tasmin Flour Mills in August 2015 for a period of five years through a contract, the tenure of which was later extended till 2026.

Tasmin Flour Mills only received fees from ACI for crushing wheat in its mill as per the contract. But ACI is responsible for all aspects of production, marketing, quality maintenance and pricing of the product. But the commission on its own accord filed a case against Nurjahan Group, said the application letter, submitted to the commission by Md Abu Sayed, a senior executive of the group.

The official, however, did not want to comment on the matter as the case is under trial.

Pradip Ranjan Chakraborty, chairperson of the BCC, told TBS, "Many companies are under the impression of having exemption from the cases and that is why they have submitted applications for. But we are now at the last stage of the trial process and who committed crimes and who did not will be uncovered soon."

Like Nurjahan Group, most of the companies denied the charges brought against them and applied to the commission for exemption, TBS found out after talking to representatives of several accused companies.

Officials of these companies complained that the BCC filed the cases without any market analysis, observation and sufficient evidence, putting the companies in trouble.

A senior official of the BCC, on condition of anonymity, told TBS, "The fact is that those who commit crimes never admit to it. The same thing is happening here."

However, there is some data insufficiency in some of the cases filed against companies, which have come up in the hearings. But most of the accused companies just want to take advantage of this."

When wheat imports halted due to the Russia-Ukraine war, the price of wheat flour skyrocketed in the country's market. 

The BCC then filed cases against eight manufacturers over the abnormal price hike in the local market, which was not in accordance with the global market.

Seeking anonymity, a senior official of a large industrial group (producer and marketer of wheat flour) told TBS that the commission has used daily newspaper reports as sources to file the cases. But the sections under which the cases were filed do not match the charges brought against the companies. 

Early hearings revealed that the commission did not have any real market data. 

It has sought import, production and supply data from each company in the hearing and plans to conduct the hearings based on that data, the official added. 

This industrial group attended a total of four hearings in the case filed against it and filed a motion to dismiss the case. 

According to the BCC sources, officials of the commission also checked the case documents and found that most of the complaints have no specific basis. 

The BCC filed cases against five companies for creating volatility in the toiletries market. 

A senior official of one of the companies that also applied for exemption of charges, on condition of anonymity, told TBS that the commission filed the case with unsubstantiated claims. The company's position has been clarified in the hearing.

Kazi Farms Limited, the company that produces and markets eggs, is also facing a case from the BCC for its alleged role in creating unrest across the country by abnormally increasing the price of eggs within a day. 

When asked about the lack of evidence in the cases, Mofizul Islam, former chairperson of the commission, said, "I am retired. I have no jurisdiction to comment on this matter."