CCI comes out with provision to facilitate pre-merger talks

Written by Ronojoy Banerjee | Ronojoy Banerjee | New Delhi | Updated: May 31 2011, 08:38am hrs
The Competition Commission of India (CCI) on Monday came out with new provision to facilitate pre-merger consultations. The move is expected to allay the industry's concerns on merger regulations and set up a formal process of dialogue with the affected parties.

"Industry bodies had voiced concerns on not having a proper framework in place for such dialogues. We have now introduced it," a CCI official told FE requesting anonymity.

He said that the CCI move should address any industry concern over the competition body creating unnecessary bureaucratic hurdles for companies.

In a notification addressed to companies the CCI said, "As indicated in accordance with the international best practices, CCI is happy to inform the availability of the facility of informal and verbal consultation with the staff of CCI prior to the filing of notice to a proposed combination."

The commission has also indicated that the two sides could engage in consultations which would be purely informal in nature. "The advice would be given as an additional assistance facility, and would not be deemed to be the opinion of the commission in any manner whatsoever or binding on the commission," it said.

Earlier this month the CCI introduced significant departures from the draft regulations. The key changes which take effect from June 1 include introducing a flat slab on notification fees that the industry would have to pay. For deals that fall under schedule 1 the notification fee stands at R50,000 as compared to R10 lakh earlier. In case of other bigger transactions the fee would be R10 lakh as compared to R40 lakh earlier.

As per the Competition Act only those proposals would require the CCI's approval where the companies have combined assets of R1,000 crore or more, or a combined turnover of R3,000 crore or more. The commission has also spelt out the threshold for the target company whose net assets have to be a minimum of R200 crore or it should have a turnover of R600 for CCI's intervention.