More than a year after the Competition Commission of India (CCI) began operations, the anti-trust body is still awaiting the formal government notifications that would empower it to make binding rulings on abuse of dominant positions acquired by mergers and acquisitions (M&As) of companies.
“We are still awaiting the formal notification from the government on sections related to M&As of the Competition Act 2007,” CCI chairman Dhanendra Kumar told Hindustan Times.
Unlike many other legislations, the Competition Act, 2007 has specified that the government may specify different sections of the Act on different dates.
Mergers and acquisitions of companies are dealt with in sections 5 and 6 of the Act, which are yet to be notified.
Under the Act, any M&A that results in a combined turnover above a certain threshold will have to be cleared by the CCI.
For a domestic firm, the threshold post-merger turnover has been fixed at Rs 3,000 crore while for firms with overseas presence the threshold for the combined turnover has been fixed at $ 6 billion (or about Rs 27,600 crore).
“The Competition Act prohibits anti-competitive agreements and abuse of their dominant position by enterprises, to ensure that there is no adverse effect on competition in India,” Kumar told HT.