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The Competition Commission of India (CCI) has steeped up its probe into the cartelisation that rigged the prices of guar gum and seeds in futures market last year. This had raised prices to Rs1 lakh a quintal and forced Forward Markets Commission (FMC) to ban futures trade in this segment.
Last week, CCI had sought specific information on trading pattern from the National Commodities & Derivatives Exchange (NCDEX) regarding trading by companies believed to have traded in concert with Betul Oil in 2011-12.
Betul Oil is a Madhya Pradesh-based solvent extractor and oilcake and guar gum trading firm.
In a letter to the exchange, the commission had said Betul Oil was trading through several entities. It sought to intensify its probe into whether the company had used several entities to trade on its behalf, in violation of FMC norms.
A Betul Oil spokesperson said, “We have not violated any rule and regulation and whatever trading we did on the futures exchange was according to the rules prevailing at that time.”
Earlier, Betul was found to have used group companies to take larger-than-permitted positions in guar seed and gum futures on NCDEX. In January 2012, FMC had issued a circular that said positions of all related entities be clubbed. As a result, the exchange had clubbed the positions of group companies or related parties of Betul.
However, after an investigation by NCDEX, it was found the company had used several entities to take positions on its behalf. CCI has asked the NCDEX to provide monthly trading details of all these firms, as Betul is said to have funded these entities to take positions.
When NCDEX had issued a show-cause notice to the company, Betul had challenged the move.
Guar seeds and gum futures, in the meanwhile, were banned and, subsequently, re-launched. Now, the probe into the cartelisation is being intensified, as fresh proof is available following investigations into the money trail through bank accounts of several entities which Betul Oil had used to trade in guar gum.
