Hot rolled coils produced by Megasteel Sdn Bhd. (Pix provided by Megasteel)
KUALA LUMPUR: The Malaysia Competition Commission (MyCC) has determined that Lion Corp Bhd’s 78.89%-owned indirect subsidiary Megasteel Sdn Bhd did not infringe the the Competition Act 2010 by abusing its dominant position.
The steel product maker and property developer said this final decision was made after careful reassessment of the case with more detailed information obtained through written and oral representations submitted by Megasteel as well as further analysis made by MyCC.
“Pursuant to a notice of finding of non-infringement from MyCC dated April 15, 2016, MyCC had determined that there is no infringement by Megasteel of section 10(1) of the Competition Act 2010 as stipulated in the proposed decision,” it told Bursa Malaysia.
In November 2013, Lion Corp announced that MyCC issued the “proposed decision” that Megasteel, which makes hot and cold rolled coils, had abused its dominant position “by charging or imposing a price for its hot rolled coils (HRC) that amounts to a margin squeeze that produces anti-competitive effects in the cold rolled coil market.”
MyCC then imposed a financial penalty of RM4.5mil on Megasteel.
This is one of the rare positive news for Megasteel in recent months. The ailing company recently failed to get the Government to impose safeguard duties on the imports of HRC as per its petition, which the Malaysian Iron and Steel Industry Federation described as without merit.
Megasteel had defaulted on payment for the banker’s acceptance (BA) falling due on Sept 23, 2015, in respect of a working capital facility.
Lion Diversified Holdings Bhd (LionDiv), which owns 21.11% equity interest in Megasteel, said Megasteel had been operating under difficult environment due to the rampant importation of steel products into the country at dumping prices.
“As a consequence, Megasteel has been suffering losses for several years resulting the BA default,” LionDiv said.
“As at Sept 23, 2015, the total amount outstanding for the above loans/bonds/debts/loan stocks and the BA amounted to approximately RM3.02bil,” it added.
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