Competition regulator issues cease-and-desist against Trustees’ Association of India

The competition regulator has issued a cease and desist order against Trustees’ Association of India, IDBI Trusteeship, Axis Trustee Services and SBI CAP Trustee Company for cartelisation and coordinated fixing of fees during a fund raising by Muthoot Finance.

While no fines were imposed on errant parties, CCI noted that any continuation or recurrence of such conduct “would be construed as recidivism with attendant aggravated consequences.”

The issue started when Muthoot Finance sought fee quotes from IDBI Trusteeship for a Rs 982 crore private placement of secured non-convertible debentures (NCDs) in August 2021. IDBI Trusteeship demanded a fee markup, attributing the surge to a unified pricing structure enforced by the Trustees’ Association of India (TAI).


Competition Commission of India (CCI) uncovered that TAI adopted a "Benchmark Pricing" floor structure during a March 23, 2021 meeting, compelling member debenture trustees to abandon independent pricing starting April 1, 2021.

CCI also found that TAI’s directives to members constituted “a typical example of cartel formation by an association whereby the members could be punished for not following its diktats.”

According to the CCI verdict, TAI maintained cartel discipline by monitoring individual quotations, threatening penal repercussions, and forcing non-members to comply. In one instance, a non-member firm, MITCON, was forced to withdraw a competitive tender bid submitted to the Housing and Urban Development Corporation (HUDCO) and replace it with a higher rate.

The regulator concluded that these coordinated actions restricted market supply and eliminated competitive choices for issuers. Invoking Section 27, the regulator issued a cease and desist mandate against the four.