Competition Bill Makes Filing Acquisition Details Mandatory

The Competition Bill tabled in Lok Sabha today, exempted the acquisition of shares or financing facility extended by public financial institutions, foreign institutional investors (FIIs) and venture capital funds pursuant to any covenants of a loan or investment agreement from scrutiny by the proposed Competition Commi- ssion of India (CCI).

It has, however, made it mandatory for FIs, FIIs and VCs to file the details of acquisition including the nature of control, circumstances for exercise of such control and the consequences of default arising out of such loan or investment agreement within a week to the CCI.

The Bill has however, ruled out any post-merger review of M&As for individual companies with combined turnover less than Rs 3,000 crore or combined asset size of up to Rs 1,000 crore in India. For individual companies outside India, M&As with combined asset value less than $500 million or turnover less than $1,500 million will not be required to be pre-or-post notified to the CCI. For groups, the threshold limits have been set at Rs 4,000 crore worth of combined assets in India ($2 billion outside India) or Rs 12,000 crore turnover ($6 billion).

The Bill also said the CCI would be a body corporate with power to acquire, hold and dispose of both movable and immovable property and to contract and can sue as well as get sued. The chairperson of the commission would be appointed by the Centre and it will have not less than two and not more than 10 other members also to be appointed by the government.

The Competition Bill has also proposed setting up a