Billionaire steelmakers have appealed the Competitions Authority of Kenya (CAK) decision to fine them Ksh338 million for alleged price fixing that caused an artificial shortage.
CAK's Acting Director General Adano Wario confirmed receipt of the appeal by the authority's Competition Tribunal, challenging the fines imposed in August.
The penalties, which are the highest in the watchdog's history, were imposed after the agency conducted an investigation following complaints in the steel market.
The nine steel manufacturers include Devki Steel Mills, Corrugated Steel Ltd, Tononoka Rolling Mills, Doshi & Hardware Ltd, Jumbo Steel Mills Ltd, Accurate Steel Mills, Nail and Steel Products, Brollo Kenya Ltd and Blue Nile Wire Products Ltd.
“With regard to the steel sector, the nine manufacturers appealed the authority’s decision to the Competition Tribunal. Given that it is now a quasi-judicial matter, we cannot comment further on the specifics,” Dr Wario noted.
During its directive in August, the companies received varied fines with Corrugated Steel Ltd being the highest fined at Ksh86 million.
Tononoka Rolling Mills Ltd was the second highest fined company at Ksh62 million while Devki Steel Mills Ltd owned by billionaire Narendra Raval was fined Ksh46 million.
The companies had been accused of price fixing which saw the cost of building houses shoot up.
CAK described the behaviour as cartel-like in nature given that the company's actions were aimed at maximising profit.
"Cartels are conceived, executed, and enforced by businesses to serve their commercial interests, and to the economic harm of consumers. In this matter, the steel firms unlawfully colluded on prices and margins as well as output strategies," Wario stated then.
"This penalty is the highest-ever imposed by the Authority and it should send a clear message that cartel conduct is unlawful under the Competition Act. In a liberalized market like ours, the forces of supply and demand should signal prices, free from manipulative business practices. Agreements between competitors seek to defeat this fundamental facet of a free economy."
