JP Associates has yet again fallen under the fair trade regulator Competition Commission of India’s (CCI) lens. CCI has ordered an investigation against Jaiprakash Associates after an individual filed a case against the company.
The case was filed against the violations of the Competition Act for abuse of dominant position, directly or indirectly, by imposition of unfair or discriminatory condition in purchase or sale of goods or services, as also by predatory pricing.
As an impact of the CCI order, JP Associate’s stock crashed on both the stock exchanges. On Sensex, the stock fell by 11.64 per cent and closed at `38.35 per share. CCI has asked its Director General, the regulator’s investigating agency, to initiate a probe in respect of allegations for alleged abuse of dominant market position in sale of flat in its housing projects.
The complainant alleged that he had booked a flat in two years back in the company’s premier residential project ‘Jay Greens’. As per the agreement, the company was to give the possession of the flat in no more that 24 months. Further, he alleged that the firm failed to complete the construction and raised an illegal and unreasonable demand from him against the terms of the contract, failing which it threatened cancellation of the allotment.
Commenting on the crash seen on the company’s stock, Kunal Saraogi of Equity Trendz said, “CCI’s investigation is not such major news that could cause the share to slide. The real issue I feel is that the investors are concerned how the company plans to reduce its Rs 57,000 crore debt. The company has not given any concrete plans to reduce this enormous debt.”