Delay in notifying M&A norms irks CCI
The Competition Commission is irked over the inordinate delay in notifying the M&A provisions in the Competition Act which will invest it with the necessary powers to vet large deals.business Updated: Jun 13, 2010 14:19 IST
The Competition Commission is irked over the inordinate delay in notifying the M&A provisions in the Competition Act which will invest it with the necessary powers to vet large deals.
According to sources, the Commission is believed to have expressed its doubts whether a strong industry lobby is behind the delay. It is more than a year since the Competition Commission of India (CCI) became operational, but the norms that would give it the powers to vet high-voltage mergers are still to be notified.
Sources in the know of the things said the Parliamentary Standing Committee on Commerce that is scrutinising the provisions in Sections 5 and 6 of the Competition Act, is believed to have expressed concerns over the delay in the notifying the provision and has asked the ministry concerned about the reasons for the same.
This March, Corporate Affairs Minister Salman Khurshid had said that his ministry was ready with the M&A regulations and would notify it once the Commission develops expertise in tackling such cases.
The CCI asserts that it has enough manpower and expertise to handle any complex mergers and acquisitions issues. The Commission has hired around 70 new hands in the past three to four months and is also training them.
Although the government has operationalised several provisions of the Competition Act relating to anti-competitive agreements and abuse of dominant position, it still has yet to notify sections 5 and 6 which deal M&As. And once notified it would mandate companies to seek the CCI go-ahead for large deals.
Interestingly, when an Act is notified, all sections stand notified along with it, but the same has not happened with the Competition Act.
"We have been pleading with the government to notify Sections 5 and 6, but we are still waiting for it," said a CCI official.
The industry has long been complaining about certain provisions in the two sections, but Khurshid has been maintaining that the provisions would be industry-friendly. Some sectors, like banking, have also been seeking exemption from the said norms.
In the revised regulations, sources said, the 210-day time limit (the bone of contention for the industry) for vetting mergers has also been addressed, making provisions for pre-merger consultations and fast-track clearance.
The CCI currently has a strength of about 50 professionals with several persons on deputation from various government departments. The Commission became fully functional last May with the appointment of Dhanendra Kumar as its chairman and six others as members. It draws its powers from the Competition Act, passed by Parliament in 2002.