KUALA LUMPUR (Jan 2): The High Court here has allowed an ad interim stay on a RM415.5 million fine imposed by the Malaysia Competition Commission (MyCC) on five feedmillers pending filing of affidavits and submissions in relation to its judicial review against the fine.

Judge Datuk Amarjeet Singh Serjit Singh gave the ad interim stay as lawyer for MyCC, Jason Teoh from Jason Teoh & Partners, had said that they would submit an affidavit to show that the fine the five feedmillers are required to pay will not affect the poultry industry as they claim.

The long list of lawyers who appeared for the five feedmillers had all argued for a permanent stay on the fine sum pending the disposal of a Judicial Review against MyCC’s fine.

The feedmillers' lawyers argued that paying the fine will heavily impact the poultry industry in the country and it will affect the poultry supply chain and in doing so, affect the public.

They said that if the fine is paid now, and then returned pending appeals and the judicial review, it will do a lot of harm to the industry.

Teoh and MyCC’s other lawyer, Mervyn Lai, had disagreed and said that the five feedmillers were out of 30 in the country, therefore paying the fine would not affect the public.

Justice Amarjeet then asked Teoh to submit an affidavit on this and granted the ad interim stay.

He then set the affidavits to be filed by Jan 31, submissions to be had on March 21 and hearing to be on April 8.

Amarjeet also granted leave for the feedmillers' judicial review application. This means that the court will hear the merits for and against a judicial review and will determine whether there are merits for a judicial review proper.

The fine was imposed on the five feedmillers — of which three are public-listed companies — in December last year for colluding in a “chicken feed cartel” to fix poultry feed prices.

This is the largest fine that the quasi-judicial body, the MyCC, has imposed in its 12-year history.

The Bursa Malaysia-listed companies are Leong Hup International Bhd (KL:LHI), operating via wholly-owned subsidiary Leong Hup Feedmill Malaysia Sdn Bhd, Malayan Flour Mills Bhd (KL:MFLOUR) via partially-owned Dindings Poultry Development Centre Sdn Bhd and PPB Group Bhd (KL:PPB) through 80%-owned FFM Bhd.

The other two feedmillers are Gold Coin Feedmills (M) Sdn Bhd under Gold Coin Group and PK Agro-Industrial Products (M) Sdn Bhd under Charoen Pokphand Holdings (M) Sdn Bhd, which in turn is a subsidiary of Thai conglomerate Charoen Pokphand Group Co Ltd.

The fine was imposed after MyCC found the feedmillers to have infringed Section 4 of the Competition Act 2010 (Act 712) by entering into anti-competitive agreements and/or concerted practices in increasing the price quantum of poultry feed that contains soybean meal and maize as its main ingredients, between early 2020 and mid-2022.

MyCC’s probe revealed that there are 29 feedmillers in Malaysia, and that the five infringing feedmillers command about 40% of total market share.

According to MyCC's probe, poultry feed stood out to be a significant cost factor in poultry farming, constituting a substantial 72.8% of overall expenses.

Its investigation uncovered evidence of identical increment in the quantum of poultry feed prices, of between RM1 and RM4 per 50kg, sold by the parties between January 2020 and June 2022.

In August 2022, MyCC provisionally found that the five enterprises had infringed the competition law, and later granted the companies opportunities to submit written and oral representations.

Parent companies Leong Hup International and PPB Group had previously rejected MyCC's provisional findings, and said the allegations against their subsidiaries were without merit.

MyCC chief executive officer Iskandar Ismail, in announcing the imposition of the fine last year, said 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.

“MyCC has been tasked by the government with eradicating cartels, and we will continue to do so without fear or favour.

"We are still monitoring the chicken industry since the recent government decision to discontinue subsidies and price control on chickens. We hope the lesson learnt from this case will be a deterrent to all, particularly those cartels-to-be," he added.