The Competition Commission of India (CCI) has imposed a penalty of Rs 4 lakh on Carlyle Group’s investment vehicle, CA Plume Investments, and Bequest for failing to disclose key information related to their acquisition of Quest Global Services.In its order, the CCI stated that the acquirers had admitted to an “inadvertent error” in identifying overlaps between their businesses and that of the target company. “It is evident that the combination did not meet the criteria of Green Channel prescribed under Schedule III of the Combination Regulation,” the order said.
The CCI, in October 2023, received a notice from CA Plume Investments and Bequest regarding their proposed acquisition of a stake in Quest Global Services, along with a buy-back transaction. The acquirers had submitted that the acquisition would not result in any business overlaps between the parties involved.
Based on that claim, the deal was categorised under Schedule III of the Combination Regulations, making it eligible for deemed approval through the Green Channel route. The CCI was also informed that the transaction would not lead to any foreclosure effects in any Indian market.
However, the commission discovered that the activities of the acquirers and their affiliates, as well as those of the target company and its affiliates, demonstrated certain vertical or complementary overlaps. “Thereby, the combination did not appear to fall under Schedule III of the Combination Regulations,” the order noted.
In April this year, the CCI issued show cause notices and asked the acquirers to respond. In their reply, the acquirers admitted to an “inadvertent error in the identification of overlaps and tendered unconditional apology.”The CCI has directed the acquirers to pay the penalty within 60 days. Additionally, they are required to file a fresh notice under Regulation 8 of the Combination Regulations, providing complete and accurate information, within 30 days.