Slapped with a Rs 50-lakh fine for late filing of an application with fair trade regulator CCI, Singapore government’s investment arm Temasek says it is “disappointed” and will take steps after studying the order.

“Given the circumstances, Temasek is naturally disappointed with the decision, but respects the Commission’s decision under Indian law. Temasek will study the decision, and will take the necessary actions to follow up as needed,” the Singaporean sovereign investor said.

The fine of Rs 50 lakh was imposed on Temasek Holdings and its two subsidiaries for delayed submission of a mandatory application to the Competition Commission of India (CCI) with regard to a proposed acquisition of shares from DBS Group.

Temasek, which oversees an investment portfolio of over $169 billion, was found to have violated regulations with regard to seeking anti-trust approval for a deal within 30 days of entering into a share purchase agreement.

The application by Temasek’s two indirect wholly owned subsidiaries, Zulia Investments and Kinder Investments, was filed after a delay of 399 days.

“Temasek had originally been advised by its legal advisors in India that no filing was required for the DBS-Danamon transaction, and had acted in good faith based on legal advice,” its Managing Director (Corporate Affairs) Stephen Forshaw told PTI in reply to e-mailed queries.

“Subsequently, Temasek noticed different advice on a separate and later potential transaction. Temasek promptly took action to clarify the filing requirements for the DBS-Danamon transaction, and quickly made the requisite, though late, filing to rectify the situation,” he added.

Temasek has made several large private equity investments in India, including in Bharti Airtel, Tata Teleservices (Maharashtra), GMR Energy, National Stock Exchange and Godrej Consumer Products. One of its earliest investments in the country’s financial services space was in ICICI Bank.

The present case involved a proposed purchase of shares of banking major DBS Holdings by Temasek, a deal that was terminated at a later stage. Temasek and its units have a significant presence in India. DBS through its units is also present in various segments of the country’s capital markets.

The CCI said such violations can attract a penalty of up to 1 per cent of the combined turnover or assets of the acquirer and the target entity, but the Commission decided to impose a fine of only Rs 50 lakh as the proposed deal was between two foreign entities and was later terminated.

The two entities (Temasek and DBS Holdings), as per CCI order, had combined assets of over Rs 31 lakh crore and, hence, the fine could have been in excess of Rs 31,000 crore.

(This article was published on August 18, 2013)
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