CCP conducted six search/inspections during current year

The Competition Commission of Pakistan (CCP) conducted six search and inspections of associations, including two major undertakings, during the period from July-2010 to June 2011, reflecting increased level of enforcement by the commission.
Talking to group of journalists, CCP Chairperson Rahat Kaunain Hassan said that authorised officers of the Commission inspected the premises in use of PEL in Lahore on June 16, 2011. The company's officers initially co-operated but when the authorised officers of the Commission tried to impound the documents, the latter were forcibly stopped, manhandled and locked up. However, with careful manoeuvring, and after having obtained permission from the Commission, the authorised officers surmounted all hurdles and impounded print and electronic materials.
She pointed out that other regulatory bodies, like Securities and Exchange Commission of Pakistan (SECP), have similar powers under the law, but how many search and inspections have been conducted by the SECP? On the other hand, the CCP has carried out six search and inspections of associations during July-2010 to June 2011. Prior to this, four inspections were conducted since CCP's inspection in 2007. It is a big achievement of the CCP that during one year, six inspections have been conducted, but such inspections are a routine job of the commission.
The search and inspections exercise of two companies in Lahore was successful due to commitment of the CCP team comprising young and energetic officials. As it is a new trend in Pakistan to conduct search/inspection of individual companies, the resistance was apparently obvious in cases of two companies. An important development in one case is that the company has given assurance to the CCP that the unit would fully cooperate with the commission during inquiry proceedings.
She said that the commission welcomes the approach of the unit for its co-operation in conducting inquiry under competition laws. The corporate entities have to understand that the search and inspection exercise is part of the enforcement actions of the CCP, where there is no need to be afraid. The commission only retrieves those necessary records/documents from the business premises of the association or undertakings which are directly related to the cartelisation or serious violations of the competition laws.
The undertakings can hire the services of the corporate lawyers as compared to criminal lawyers for promoting corporate culture in the country. The corporate lawyers have a different approach, and they would assist the companies in a better way, as compared to criminal lawyers.
According to the CCP Chairperson, the authorised officers of the commission tried to inspect the premises in use of Pakistan Electric Manufacturers Association (PEMA) in Lahore. The PEMA was sharing the premises with FICO High-Tech, and the occupants of the premises physically obstructed the inspection. Thereafter, the Commission authorised some officials to forcefully conduct the inspection on 16 June 2011. The occupants again tried to physically stop the inspection, locked up the authorised officers and tried to involve them in fake cases before the police, but the authorised officers, after overcoming all obstacles, successfully impounded important print and electronic materials after much effort.
She said that the inspections of these three undertakings were conducted after the Commission received credible prima facie indication that PEMA and its members were involved in collusive bidding pertaining to the supply of transformers and other related equipment to public sector power distribution companies (discos). According to preliminary information, public sector purchases of just transformers amounted to over Rs 2.36 billion in the financial year 2010-11. With such large amount of public funds involved, curbing collusive bidding is a priority for the Commission. The inspection of these undertakings marks the beginning of the investigation into the serious allegations of anti-competitive practices levied against the formers.
Rahat said that the inspections conducted in the premises of FICO and PEL were the first such actions involving individual business undertakings. Previously, the Commission had inspected premises linked with various trade associations. These inspections indicated beyond any doubt that the Act applies to everyon,e without exception, and that the Commission has the will and the means to apply the laws without fear or favour, she added.
These inspections point out the complexities involved in inspecting individual undertakings and demonstrate that the Commission has resources and strategies to overcome any obstacle. While inspection of trade associations' premises have generally taken around an hour or so, the inspection of FICO and PEL took around 5 and 10 hours respectively, which the authorised officers endured with ease, she added.
She pointed out that non-compliance with the Orders of the Commission and obstructing or interfering with the ongoing inspection of the Premises would entail a penalty up to Rs one million. It may also be noted that non-compliance of the Order of the Commission constitutes a criminal offence punishable imprisonment which may extend to one year or with a fine which may extend to Rs 25 million.
Therefore, it is of paramount importance that the senior management of any undertaking should have the knowledge of the provisions of the Act, in order to avoid any non-compliance. In particular, the undertakings concerned should ensure that they have procedures in place to deal with an inspection of their premises, should the authorised officers of the Commission turn up at their premises, and brief all relevant personnel accordingly, she added.