In a recent notification, the Ministry of Corporate Affairs erased the requirement to apprise the Competition Commission of India (CCI) within 30 days of the signing of a deal for a merger and acquisition (M&A).
However, an M&A deal can’t be implemented without CCI clearance. So, competition lawyers say the rule change would end the practice of sending ‘half-baked filings’ to avoid heavy penalties. Earlier, they say, in the rush to comply with the deadline, these filings would contain little substantive information.
The penalty used to be one per cent of annual turnover or the relevant assets for delayed filings.
Hence, the experts believe the change would result in companies trying to send all the requisite documents at one go to the CCI, which could result in wrapping up of M&A cases within stipulated 210 days.
Till now, the CCI would approach companies every now and then after getting their M&A filings for clarifications. When a clarification is sought, the 210-day period was usually exceeded.
Competition lawyers expect the CCI to hold consultations with stakeholders so that parties would be aware of what exactly has to be sent for the competition watchdog to probe in such deals.
A competition lawyer with a leading law firm opines, “This will give companies time to assess the market and ascertain what all information on the deal needs to be produced to the CCI.” He narrated a recent deal where only part of the needed information was furnished to the CCI, to avoid being penalised.
India was reportedly the only country to have a 30-day filing norm.
Source: Business-Standard 