Brief on Notifications amending section 5 and 6 of the Competition Act

As per sections 5 & 6 of the Competition Act, the commission is empowered to probe a corporate deal for any possible breach of the competition law. However, the government has set a threshold limit as per which only those M&As would come under the CCI purview that have combined assets of R1,000 crore or more or combined turnover of R3,000 crore or more.

To approve these M&As the commission can take up to a maximum period of 210 days. The long waiting period had raised myriad concerns among industry bodies that argued that any leakage of information could jeopardise the deal. The commission has also set a threshold limit for a target company’s acquisition. According to the revised norms, the target company’s net assets have to be a minimum of R200 crore or turnover of R600 crore for a CCI scrutiny.

However, in a set of draft notifications issued on Wednesday, the commission reduced the total time period for approving an M&A within 180 days, thereby giving India Inc relief of just 30 days. The commission however cautioned corporate houses that if two concerned parties failed to appraise the CCI of an M&A, then the commission suo moto could initiate a probe. Following the notifications, the commission is also empowered to order the parties to modify the M&A deal to make it competitive in nature.

CCI  Notification/Circulars:-

1. CCI – Government exempts ‘Group’ exercising less than fifty per cent of voting rights in other enterprises from the provisions of section 5 of the Competition Act, 2002 for a period of five years
2. Competition Commission of India Enhances value of turnover, by fifty per cent for the purposes of sections 5 of the Competition Act, 2001
3. Govt. exempts Exempts enterprise, whose control, shares, voting rights or assets are being acquired has assets of the value of not more than Rs.250 crores or turnover of not more than Rs. 750 crores from the provisions of Section 5 of the Competition Act, 2002 for a period of five years
4. Corrigendum to Notification GSR 482(E) dated 04 March, 2011 regarding Exemption of certain group from provisions of section 5 of Competition Act, 2002 for a period of 5 years
5. Notifications for Effecting Section 5, 6, 20, 29, 30 & 31 of Competition Act – Notification no. S.O. 479(E)

Related posts:

1. Competition Commission of India Enhances value of turnover, by fifty per cent for the purposes of sections 5 of the Competition Act, 2001
2. Notifications for Effecting Section 5, 6, 20, 29, 30 & 31 of Competition Act – Notification no. S.O. 479(E)
3. Govt. exempts Exempts enterprise, whose control, shares, voting rights or assets are being acquired has assets of the value of not more than Rs.250 crores or turnover of not more than Rs. 750 crores from the provisions of Section 5 of the Competition Act, 2002 for a period of five years
4. Competition Commission of India (Return on Measures for the promotion of Competition Advocacy, Awareness and Training on Competition Issues) (Amendment) Rules, 2010 – Amendment in rule 3
5. Statutory Functioning of Competition Commission of India