Temporary stay on RM415.5m fine against alleged poultry feed cartel
Five firms do not need to pay a combined fine of nearly RM415.5 million for now to the Malaysia Competition Commission (MyCC) over alleged involvement in a “chicken feed cartel”.
This was after the Kuala Lumpur High Court allowed an ad-interim stay on the fine against the poultry feed manufacturers.
Summary
Kuala Lumpur High Court allows five chicken feed firms’ bid for ad-interim stay against an RM415.5 million fine imposed on them by the Malaysia Competition Commission.
Companies have pending appeal before the Competition Appeal Tribunal to quash fines for alleged price-fixing.
Five companies have obtained an ad-interim stay on a combined RM415.5 million fine imposed on them by the Malaysia Competition Commission (MyCC) over alleged involvement in a “chicken feed cartel”.
The Kuala Lumpur High Court allowed their application, and the firms do not have to pay the fine for now.
The firms - Leong Hup Feedmill Malaysia Sdn Bhd, Gold Coin Feedmills (Malaysia) Sdn Bhd, FFM Berhad, Dindings Poultry Development Centre Sdn Bhd, and PK Agro-Industrial Products (M) Sdn Bhd - sought the stay pending the disposal of their judicial review.
The judicial review is over the Competition Appeal Tribunal’s refusal to stay the MyCC fine against the firms, pending their appeal before the tribunal.
The tribunal is set to hear their appeal to quash the fine next month. The civil court action targets the tribunal’s refusal to stay the fine.
On Dec 22, MyCC announced the fine against the five firms for allegedly forming a price-fixing cartel.
MyCC said the fine was over alleged infringement of Section 4 of the Competition Act 2010.
“Investigation by MyCC between January 2020 and March 2022 unravelled the distortion in the poultry feed market with multiple evidence in the form of price announcements, pricing patterns, and communication among the enterprises,” Bernama quoted MyCC as saying.
‘Strong case against companies’
MyCC claimed it uncovered evidence of identical increments in poultry feed prices among the parties from January 2020 to June 2022 and found the five enterprises allegedly employed a calculated strategy to create the illusion of rising poultry feed costs due to hikes in raw material costs.
It alleged that WhatsApp chats and call logs recovered during the investigation correlated significantly with the dates of the price announcements, which strengthened the case for a link between communication practices and pricing decisions.
FFM was imposed with a penalty of RM42.69 million, Gold Coin (RM97.51 million), Leong Hup (RM157.47 million), PK Agro (RM47.8 million), and Dindings (RM70.02 million).
“The enterprises are also required to include a provision in their respective codes of conduct to recognise the involvement in competition law infringements as misconduct.
”Cartels are a supreme evil in competition law and a form of economic sabotage at the highest level, more so in a public interest case,” said MyCC chief executive officer Iskandar Ismail.
“We will continue to monitor the poultry industry without fear or favour to eradicate cartels, particularly after the government’s recent decision to discontinue subsidies and price control on chicken.
“We hope the lesson learned from this case will be a deterrent to all, in particular cartels-to-be,” he said.
Lawyers Ranjit Singh, Ambiga Sreenevasan, Shanti Morgan, Sivaram Prasad, and Manshan Singh acted for Leong Hup Feedmill Malaysia, FFM, Dindings Poultry Development Centre, PK Agro-Industrial Products, and Gold Coin Feedmills respectively.
Counsel Jason Teoh and Mervyn Lai appeared for MyCC.
