New Delhi (TIP)- Antitrust body Competition Commission of India (CCI) is investigating the trustee units of State Bank of India, Axis Bank and IDBI Bank for suspected collusion on fees, triggering a lawsuit by a group representing them.

Indian regulations mandate that companies raising debt appoint a so-called “debenture trustee” to protect the interests of investors. The trustees charge a fee from the companies issuing the debt and make independent due diligence checks on them. The three under investigation — SBICAP Trustee Company, Axis Trustee and IDBI Trusteeship — are among the leaders in the business in India overseeing hundreds of billions of dollars by rendering trustee services for not just debt securities, but also real estate and other investment funds.

The CCI in a confidential December order stated the Trustees Association of India — a body where the trio are founding members — last year “substantially” hiked the fee for assisting companies raising debt and prevented members from going below a floor price, thereby hurting competition. The association has launched a court challenge in Mumbai that seeks to quash the antitrust investigation directive it has termed “illegal” and “capricious”, according to court filings. The lawsuit will be heard on Thursday.

Source: Reuters