NEW DELHI, Oct 9 (Reuters) - India's Madison Communications is asking a court to quash an antitrust investigation into the advertising agency, arguing its executives were unlawfully questioned during March raids without an attorney present, court papers reviewed by Reuters show.
Madison was among numerous ad agencies and a group of broadcasters raided by the Competition Commission of India (CCI) on suspicion of collusion over advertising rates and discounts, in the country's strictest regulatory action on the sector to date. Other agencies raided include global giants WPP's (WPP.L), opens new tab GroupM, Dentsu (4324.T), opens new tab, Publicis (PUBP.PA), opens new tab and Omnicom (OMC.N), opens new tab.
The legal action filed by Madison with the High Court of Delhi on October 8 is the first to seek to have the probe into one of the agencies halted.
According to the 276-page court papers filed on October 8, Madison's Chairman Sam Balsara and Executive Director Vikram Sakhuja were not given any opportunity "to engage or consult lawyers before their statement was recorded in the middle of the night, in the presence of armed personnel".
In India, court filings are not made public.
SEARCH MEMO ISSUE
Madison is also arguing that the raids have become illegal as the antitrust watchdog has not provided the company with information detailing which documents and files were seized during the search, which is required under Indian law.
"It is a violation of the principles of transparency, fairness, and due process," the court papers said.
The CCI did not respond to a Reuters request for comment. A spokesperson for Madison also did not respond to a request for comment.
The watchdog launched the investigation after Dentsu disclosed alleged industry malpractices in February 2024 under its leniency program, which allows lesser penalties for firms that share evidence of malpractice.
The CCI's initial assessment found that the firms were entering into secret pacts to coordinate and agree on pricing via a WhatsApp group, according to confidential case papers seen by Reuters.
The case will be heard by a New Delhi judge on Thursday. Potential outcomes include agreeing to hear Madison's arguments in hearings that might take weeks, putting the CCI's investigation on hold or throwing out Madison's plea.
Publicis in August also asked the Delhi High Court to order the watchdog accede to its requests to have access to some case files. The court has asked the CCI to explain its stance and will also hear that case on Thursday.
In its action, Publicis has not sought to have the investigation into it quashed.
EXECUTIVES SUMMONED
Madison is also arguing that the watchdog has unlawfully not allowed its lawyers to review essential evidence that forms the basis of the case.
In an August letter to Madison, contained in the court papers, the CCI argued that Indian law does not allow "for inspection of records of investigation" while the probe is underway.
CCI investigations typically take several months. The regulator has powers to impose financial penalties on the agencies of up to three times their profit or 10% of an Indian entity's global turnover, whichever is higher, for each year of wrongdoing.
The CCI has also summoned Balsara and Sakhuja to appear before the investigation team next week to provide certain clarifications, according to the court papers. Madison is seeking to have the summons quashed.
Reporting by Aditya Kalra; Editing by Edwina Gibbs