The industry chambers have expressed concern regarding providing price sensitive information to the Competition Commission of India (CCI) prior to any merger and acquisition, stating that the move would act as a barrier to the growth of the corporate sector. In the event of two parties merging where the combined assets exceed Rs 1,000 crore and turnover exceeds Rs 3,000 crore, it becomes mandatory for the concerned parties to provide certain price sensitive information prior to concluding the merger.
The Confederation of Indian Industry (CII) director general, Chandrajit Banerjee said while CII welcomes the formation of CCI and would like to see it functional, it has an objection on the pre-merger notification as this would not help corporate growth. This also gives away lot of price-sensitive information which companies might not like to give.
Amit Mitra, secretary general of Ficci also said CCI should focus on abuse of dominance and not on mergers and acquisitions as this would come in the way of economic growth.
?We will appeal to the new chairman to focus on ?abuse of dominance? as the main focus of the commission. As far as the mergers and acquisitions are concerned, we would like to see a longer time period given for a better understanding between the commission and business?, Mitra said.
He said Ficci would urge the chairman to give industry a few years for better understanding and internalisation of the competition law. ?We would also like to request the commission not to come in the way of the mergers and acquisitions unless there is abuse of dominance so that Indian industry can develop the economies of scale to become global leaders in future?, Mitra added.
CCI said the industry is still not totally familiar with the provisions of the Competition Act. A CCI official said if companies want to indicate that some information is confidential then it would treat it as confidential and will give an undertaking that it would be kept confidential.
Dhanendra Kumar, chairman, CCI said it is not against M&A and the fear of the industry is ?the fear of unknown?. He said most companies don?t fall under the purview of the CCI, therefore majority of the companies have no reason to fear. The only apprehension the companies might have is regarding the decision of CCI on whether a merger should take place or not gets within a period of 210 days which is a long time. Kumar said the mandated 210 days is the maximum limit and the decision can come about in lesser time also.