KUALA LUMPUR (Oct 2): The High Court here has allowed four feedmillers’ applications for a judicial review to stay the decision of the Malaysia Competition Commission (MyCC) to impose a RM367 million fine against them. 

This comes after a December 2024 decision by the Competition Appeal Tribunal (CAT) under the Ministry of Domestic Trade and Cost of Living to deny a stay of the fine imposed by the MyCC. 

The four feedmillers were challenging CAT’s denying of the stay at the High Court via the judicial review. 

In Malaysia, a judicial review is a process where the High Court reviews the decision, action, or omission of a public authority, tribunal, or decision-maker, to ensure it complies with the law. It is not an appeal on the merits, but rather a check on the legality, fairness, and reasonableness of the decision-making process.

The four 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, PPB Group Bhd (KL:PPB) through 80%-owned FFM Bhd, and Gold Coin Feedmills (M) Sdn Bhd under Gold Coin Group. 

Initially, the MyCC had imposed a RM415.5 million fine on five feedmillers. 

The fifth feedmiller, who does not appear in this particular judicial review, is PK Agro-Industrial Products (M) Sdn Bhd under Charoen Pokphand Holdings (M) Sdn Bhd, which is a subsidiary of Thai conglomerate Charoen Pokphand Group Co Ltd.

High Court judge Datuk Amarjeet Singh Serjit Singh, in his decision on Thursday, also ordered RM5,000 costs to be paid by MyCC to the four feedmillers. 

Lawyer Nicole Leong appeared with Ranjit Singh for Leong Hup. Nicole was also co-counsel for Datuk Ambiga Sreenevasan, representing FFM. 

Jason Teoh and Nicholas Lai appeared for MyCC. 

The fine was imposed on the feedmillers for colluding in a “chicken feed cartel” to fix poultry feed prices.

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

The fine was imposed after the MyCC had 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.

Through its investigation, the MyCC had 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, the MyCC had 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 and PPB had previously rejected MyCC’s provisional findings and said that the allegations against their subsidiaries were without merit.

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