The Competition Commission of India (CCI) does not intend to indulge in ‘witch-hunting' on mergers and acquisition (M&A) deals that take effect before June 1.
The Chairman, CCI, Mr Dhanendra Kumar, asserted that “We do not intend to start witch-hunting on whatever (M&As) has happened before June 1. Our intention is not to impede, retard or decelerate industrial or economic growth.”
Last week, the Government notified the M&A provisions of the Competition Act, empowering the CCI to look into whether such combinations will have an adverse effect on the market from a competition perspective.
“We would like to implement the M&A norms after June in a manner that investments and M&As are not slowed down …The notification is very clear… Whatever has been given effect to before June 1 is not covered,” he told
He, however, declined to comment on specific M&A cases.
The CCI will play the role of a facilitator in attracting foreign direct investments through an effective competition regime ensuring a level-playing field.
Mr Kumar said several foreign and domestic companies have already approached the CCI to learn more about the M&A norms.
“A lot of companies, particularly foreign companies, are approaching us saying they should be able to file (before the CCI) today so that they get legal certainty (on the deal),” he said.
Timeline
Asked about the CCI's timeline for a decision on M&As, he said that the Commission has a self-imposed 180-day timeline to clear even the big M&As. In any case, the international practice is that 90-95 per cent of the M&As are cleared by their respective competition panel in just 30 days. It is the bigger M&As that take time.
Mr Kumar said he is not anticipating a deluge of M&As coming before the CCI as the new norms concern mainly the large deals.
“As India is an attractive investment destination and also because many Indian companies are going overseas, I do not anticipate more than 40-45 cases a year before us,” he said.
Queried if M&As in banking and other sectors such as shipping would be exempted from the CCI lens, he said since Section 54 of the Competition Act gives the Government the power to grant exemption, it was up to the Government to take a call on this.