With the superannuation of its chairperson on October 25, the Competition Commission of India (CCI)  does not have the requisite quorum to transact business. This is likely to put merger-and-acquisition (M&A) approvals on hold.

The Competition Act mandates a three-member quorum, but the CCI currently has only two members.

One of the key mandates of CCI is to review combinations (M&As), and if this is not done within 210 days then the transaction is deemed approved. 

The lack of quorum in CCI is likely to adversely affect the merger control regime, and delays in examining merger filings may hamper FDI flows, say economy watchers.

The CCI comprises a chairperson and not fewer than two and not more than six other members appointed by the Central Government. 

Selection process

The chairperson and other members must be chosen for their ability, integrity and standing, possessing special knowledge and professional experience of not less than 15 years in international trade, economics, business, commerce, law, finance, accountancy,management, industry, public affairs or competition matters, including competition law and policy.

Last month, the selection panel had interviewed over 50 candidates for the chairperson’s post and a final decision is expected soon. The Centre had, in the interim, on October 25 appointed CCI member Sangeeta Verma as acting chairperson for three months or until further orders, whichever is earlier.

As per Section 22 of the Competition Act, the commission shall meet and conduct business as prescribed by regulations. 

Further, if the chairperson is unable to attend any meeting of the commission, then the seniormost member at the meeting shall preside over it. 

All questions before the commission would be decided by a majority of the members present and voting, and if the votes are tied then the chairperson or, in his absence, the member presiding shall have a second or casting vote. It further prescribes a three-member quorum for such a meeting.

Missing quorum

Legal experts point out that the absence of a chairperson is not a problem in itself so long as there is a quorum of three members. The current problem is the lack of quorum and not absence of chairperson, they say.

Some market watchers also felt that, since the CCI is a market regulator, the selection should have been initiated in advance by the Ministry of Corporate Affairs (MCA). “Keeping the top position of such a key economic regulator vacant is definitely not advisable, particularly when there is no minimum quorum,” said a person close to the development.

Over the years, the composition of CCI has undergone a sea change. The Union Cabinet chaired by Prime Minister Narendra Modi had in April 2018 approved the rightsizing of the panel from one chairperson and six members (totalling seven) to one chairperson and three members (totalling four). However, even this reduced strength is not being maintained and the CCI has, for the last five years, been working with only a chairperson and two members, economy watchers pointed out.

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Published on November 2, 2022