The ACC- Gujarat Ambuja cement deal has acquired political overtones with Subramanian Swamy, urging the chairman of the parliamentary standing committee on finance to probe the deal.
Swamy, well-known for his penchant for fishing in troubled waters, had even said that a public interest litigation would "become inevitable" otherwise.
In a written statement, Swamy former union minister for commerce, law and justice, says the coming together of the two cement giants is akin to the Microsoft case in the US, (the US government used Anti Trust laws to prevent the software major from acquiring an unduly large share market share). He alleges that such an amalgamation would give the combined entity a "strong hold" on cement making which could in turn lead to price-fixing and ultimately hurting the end-consumer.
With consumer interest at peril, he says, the Indian legal system's equivalent of the US' Anti Trust law should automatically kick in.
The alliance will have under its control, a 20-million tonne per annum production capacity, making it among the top ten cement conglomerates in the world. They would also have a 20 per cent market share overall. In the northern region this could be even higher, it is pointed out.
Swamy says that Himachal Pradesh and the Punjab units contribute to at least 67 per cent of GACL's profit and thus the company has every reason to try and preserve price in the northern market.
