CCI may probe leak of sensitive info in Asian Paints case to law firm, say govt sources

New Delhi, June 21, 2025 — The Competition Commission of India (CCI) is reportedly examining the possibility of launching a formal probe into an alleged leak of sensitive internal information concerning Asian Paints Ltd. to a law firm involved in a related legal matter, according to high-level government sources familiar with the development.

If the probe is approved, it could mark a significant escalation in the scrutiny of corporate practices and legal collaborations in ongoing competition cases. The CCI, India’s antitrust watchdog, has taken serious note of preliminary inputs suggesting that confidential data may have been inappropriately accessed or shared.

Details of the Allegation

Sources within the Ministry of Corporate Affairs (MCA) revealed that an internal note circulated within the CCI flagged "potential impropriety" in the handling of case documents linked to an earlier investigation into Asian Paints' alleged anti-competitive conduct involving the distribution network and dealer policies.

It is alleged that some confidential submissions made by Asian Paints to the CCI under a "non-public" clause found their way into the possession of a law firm representing a party with an adverse interest in the matter. The CCI is now determining whether this occurred due to internal mishandling, third-party access, or a deliberate leak.

“There is a clear concern that confidential information meant to be seen only by the Commission or designated officers may have been shared outside that circle,” said a senior government official who spoke on condition of anonymity.

Asian Paints’ Response

Asian Paints has categorically denied any wrongdoing. In a statement, the company said, “We operate with the highest standards of corporate governance and transparency. We are not aware of any breach in the confidentiality of the proceedings, and we are fully cooperating with all authorities on the matter.”

The company also emphasized that it was never officially informed of any leak and has demanded that any investigation be fair and impartial.

Legal and Market Ramifications

Legal experts indicate that if proven, the unauthorized access or leak of confidential CCI documents could have far-reaching implications—not just for Asian Paints, but also for the broader legal and regulatory ecosystem.

“Such a breach, if it happened, undermines the integrity of the antitrust enforcement process. It could trigger disciplinary actions against intermediaries and compel the CCI to relook at its document handling and privacy systems,” said Anurag Shah, competition law partner at LexMinds Legal.

Some analysts suggest that this may slow down other high-profile CCI investigations, as protocols may be reviewed and additional security mechanisms installed.

Market Reaction and Investor Sentiment

Following the news, shares of Asian Paints witnessed mild volatility in intraday trade, shedding up to 1.2% before recovering slightly. While the market response has been muted, analysts warn that prolonged regulatory scrutiny could weigh on sentiment.

“While this is not a financial impropriety case, anything that hints at operational lapses in compliance could make investors cautious in the near term,” noted Harshit Patel, Senior Analyst at Religare Broking.

Asian Paints, a bellwether stock in the FMCG and decorative paints segment, has otherwise been resilient amid a volatile broader market. The company’s fundamentals remain strong with consistent revenue growth and robust margin profiles.

Broader Concerns About Regulatory Confidentiality

This development comes at a time when regulatory authorities are increasingly emphasizing data security and integrity. The CCI, over the past two years, has ramped up digital documentation processes, but insiders acknowledge that access protocols are still evolving.

“It’s crucial that sensitive documents are safeguarded, particularly when they pertain to competitive dynamics and corporate strategy,” said Dr. Prerna Mehta, a policy researcher at the Indian School of Business. “Any lapse damages trust in the system and the fairness of the competition regime.”

What Happens Next?

According to the sources, the CCI is currently seeking internal explanations and has not yet issued formal notices. However, if the probe progresses, it could lead to:

• Disciplinary action against individuals or firms involved in the leak.

• A re-evaluation of the evidence in the original Asian Paints case.

• Guidelines or amendments to the current confidentiality rules under the Competition Act, 2002.

The CCI may also collaborate with cybersecurity and information governance experts to audit the access trails of sensitive documents.

Investor Outlook

Despite the regulatory murmurings, long-term investors are not expected to significantly alter their holdings in Asian Paints at this stage. The company's consistent performance, strong brand, and sectoral leadership continue to support its valuation.

However, institutional investors may seek greater clarity during the upcoming quarterly earnings call. Any signs of reputational risk or management distraction due to regulatory issues could become a concern.

“Stakeholders would expect the company to reinforce its legal and compliance framework to avoid similar issues in the future,” added Patel of Religare.

As the CCI weighs its next move, the case highlights the growing sensitivity around confidential regulatory documents and the legal ecosystem’s responsibility in safeguarding them. For Asian Paints, the spotlight is now not just on its market dominance but also on how well it navigates a possible reputational test.