At least 20 M&A deals worth $ 1.3 billion had been stuck for the last four months as the CCI did not have the quorum required to clear deals.
The Competition Commission in the absence of requisite quorum will soon invoke the “doctrine of necessity” principle to examine merger and acquisition deals, according to sources. Currently, the Competition Commission of India (CCI) has only two members and the post of Chairperson is vacant since Ashok Kumar Gupta retired in October, 2022.
For examining mergers and acquisitions the fair trade regulator needs a quorum of three members. Since there is a lack of quorum, many deals have been awaiting approvals for months.
“The Commission has a credible track record in mergers but this hiatus is hitting the Commission’s image and the country’s reputation for ease of doing business,”
noted Vinod Dhall, former head of the CCI.
Industry has expressed concerns over the situation, and cited that even some foreign direct investment proposals are hanging fire due to the regulatory delay.
Against this backdrop, Attorney General R. Venkataramani intends to allow the Commission to decide on mergers and acquisitions in its current incomplete composition, until a full quorum is formed. This will be done by invoking the “doctrine of necessity” clause, which gives the government overarching powers to take measures that may not be part of the law concerned, but it could still use at a particular time to deal with an exigency or to restore stability.
Sources: The Economic Times, Financial Express
