TK Group’s Shabnam Vegetable Oil Fined Tk 324.4 Million for Edible Oil Market Manipulation

Bangladesh’s Competition Commission has imposed a fine of Tk 324.4 million (Tk 32.44 crore) on Shabnam Vegetable Oil Industries Ltd., a concern of TK Group, for alleged market manipulation and anti-competitive practices in the edible oil sector.

The information was disclosed in a press release issued on Thursday by Mahbubur Rahman Khan, Secretary of the Bangladesh Competition Commission.

According to the commission, an investigation was initiated following a sharp increase in edible oil prices during February and March 2022. Earlier findings by the Directorate of National Consumer Rights Protection indicated that several companies had created supply disruptions and engaged in irregularities involving supply orders (SOs).

A three-member inquiry committee formed by the Competition Commission later found evidence that Shabnam Vegetable Oil Industries and several other companies had violated provisions of the Competition Act, 2012.

The investigation revealed that the company allegedly supplied products against expired supply orders, violating provisions of the Essential Commodities Marketing and Distributor Appointment Order, 2011. The commission considered these actions anti-competitive and harmful to market competition.

In its observations, the commission stated that between January and June 2022, the company restricted production and supply while allegedly coordinating with other market players to influence prices and create an artificial increase in edible oil costs.

The company has been instructed to pay the fine within 30 working days from the date of the verdict. However, it retains the legal right to appeal or seek a review of the decision.

The commission also noted that cases are ongoing against several other edible oil companies, including Globe Edible Oil Ltd., City Edible Oil Ltd., Bangladesh Edible Oil Ltd. and United Edible Oil Ltd. over similar allegations of market manipulation and anti-competitive conduct.