The Hindu Business Line : Intra-group mergers may not come under competition panel scanner

New Delhi, Feb. 25 The fears of the domestic corporate sector, which is planning intra-group mergers and de-mergers, may be unwarranted as such transactions would not necessarily come under the Competition Commission of India (CCI) scanner.

The provisions of the Competition Act states that no person or enterprise shall enter into a combination which causes or is likely to cause major adverse effect on competition within the relevant market in India and such a combination shall be void. The intra-group mergers generally do not fall into this category.

The Minister for Corporate Affairs, Mr Prem Chand Gupta, told Business Line, “even if such mergers need to be notified to the Commission, they are likely to get cleared within 30-60 days.” Besides, in the draft regulations certain categories of transactions are treated as not likely to have adverse effect on competition. The genuine concerns of all the stakeholders will be addressed through regulations, which would be framed through a transparent and wide consultative process, he added.

“While the Government would certainly not like cartelisation, monopolisation or abuse of dominant position by a corporate in any sector, the trade and industry should keep in mind that consumer interest needs to be protected when framing any regulation.”

Mr Gupta said: “We have been having constant dialogue with the industry on their concerns pertaining to ‘combination regulations’ and felt that most of the apprehensions are outcome of incomplete and inadequate appreciation of the spirit of the law. There appears to be a presumption that the provisions of the law are going to be implemented with a negative mindset.”

India Inc has been making a case for such mergers to be exempted from the mandatory notification procedure. It argues that this should be clarified by way of a suitable explanation in the regulations. According to the industry, such mergers would neither lead to control not adversely effect competition. “Intra group restructuring in any way, either by mergers, de-mergers, restructuring or any other means, does not alter the situation, as these take place within the group,” it points out.

The flexibility for expansion should be provided for in the draft combination regulation also, industry players say.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Fire at Arvind Mills warehouse

ONGC notifies four discoveries in a month

Dish TV: Uncertainty ahead on cancellation of pref offer

Jubilant bags $92-m worth contract research deals

Maruti pays Rs 2,635-cr excise

Intra-group mergers may not come under competition panel scanner

W.S. Ind Vizag plant to go on stream by June

Opto Circuits to buy US co for $68 m

Crompton Greaves ties up with Dutch company

Bonus offer boosts Reliance Power

Bharat Biotech to launch upgraded hepatitis B vaccine

Volatility in crude may hit IOC refining margins

Honda Siel expects approval for Civic Hybrid soon

NTPC appoints 14 new EDs