The much-awaited relief for deal makers is here. The Ministry of Corporate Affairs has exempted companies from the 30-day requirement of notifying a merger or amalgamation transaction to the Competition Commission of India (CCI). The exemption has been given for a period of five years.
BloombergQuint had first reported the likelihood of this exemption in October last year.
With this measure, parties will be free to submit notice of combinations to the CCI at a time convenient to them but prior to giving effect to such combinations, a ministry press release said.
So far, parties involved in mergers and amalgamations had to notify the CCI within 30 days of the proposal being approved by their board of directors. In the case of acquisitions, a filing to the CCI was necessary within 30 days of the date of execution of a binding agreement or other such document. A party that failed to notify the CCI within 30 days could face a penalty of up to one percent of the total assets or turnover of the combined value of worldwide assets of the parties.
The regulator has penalised dozens of companies for late filings; the highest penalty being Rs 5 crore on GE-Alstom last year.
This is a welcome step as it aligns the Indian merger control regime with internationally accepted best practices, Avaantika Kakkar, a competition law partner at law firm Khaitan & Co. said. The exemption, she added, reduces the burden on parties to ensure strict adherence of the 30-day time-period.
This will help parties to submit more comprehensivenotifications to the CCI, ultimately leading to fewer invalidations and fasterapprovals. This will also be helpful forthe CCI's case teams, requiring lesser time and resources to examine variousaspects of the transaction and its impact (actual or potential) in the relevantmarket in India.Avaantika Kakkar, Partner, Khaitan & Co.
The exemption is also beneficial in cases where the precise triggering event is not clear, she added.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
