New Delhi: Competition watchdog CCI on Monday said it will finalize rules and regulations on merger and acquisition provisions by the end of April 2011, a development that would make it mandatory for companies to seek the commission’s approval before takeovers.
The regulations regarding the forms which are to be applied for and documents which have to be attached are among the operational details that are to be notified, CCI chairman Dhanendra Kumar said on the sidelines of an Assocham event in the national capital.
“Hopefully, we should be able to notify them (regulations) by the end of this month or at the most by the beginning of next month,” he said.
The Commission has received a number of comments, suggestions, and representations on the draft regulations from India and overseas, he said, adding, “We are analysing them and will take a view on all these suggestions and inputs before we finalize the regulations”.
From 1 June, all large companies would require approval of the Competition Commission of India (CCI) before going ahead with merger and acquisitions.
The CCI has been empowered to do so with the notification of sections 5 and 6 of the Competition Act, 2002.
The government issued notification in this regard on 4 March 2011.
The Commission has to notify regulations in furtherance of that Government notification, he said.
According to provisions of the Act, companies with a turnover of over Rs 1,500 crore will have to approach the CCI for approval before merging with another firm.
Among other things, CCI would take a prima facie view on proposed combinations within a month of filing by companies, addressing a major concern of industry about the time limit the body would take to vet mergers.
Also, the maximum time limit the CCI would take to vet mergers has been reduced to 180 days, from the earlier 210 days, following pressure from the industry.
Besides, only those proposals would need the CCI’s nod where the companies have combined assets of Rs 1,000 crore or more, or a combined turnover of Rs 3,000 crore or more.
Also, the target company’s net assets have to be a minimum of Rs 250 crore or a turnover of Rs 750 crore for CCI intervention.