CII ask govt to ease overseas M&A regulations

Terming existing corporate laws as complex and not conducive to overseas M&A by domestic firms, CII on Sunday asked the government to facilitate such deals by easing regulatory norms to increase the presence of Indian firms in global markets.

”... The growth of the Indian multinational is severely restricted by the regulatory framework for cross—border transactions,” CII said.

In a memorandum to the Department of Industrial Policy and Promotion, which frames FDI norms in the country, the chamber said several provisions in different regulations like the Companies Act, Competition Act and SEBI Takeover Code, overlap and are conflicting.

”... (Overlapping and conflicting provisions) impose substantial restrictions on the quantum and size of overseas deals,” it said.

Citing an example, the CII said the process of mergers and acquisitions under the existing Companies Act is a long court driven process. “It does not allow for contractual mergers (without court intervention) or mergers of an Indian company into a foreign company,” the chamber added.

On a proposed provision for restricting the number of step down subsidiaries in the Companies Bill, the CII said, “This would be a major impediment toward overseas acquisitions by Indian companies.”

In the memorandum, the CII also highlighted several other provisions contained in different Acts, which it found restricted M&A by Indian companies.

Seeking a conducive environment for M&A, the industry body said, “The future growth of Indian companies will be influenced by the share that they can garner in the world market.” - PTI

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