M&A Approvals Likely to Get Delayed as CCI Set to Go Inquorate Again

M&A Approvals Likely to Get Delayed as CCI Set to Go Inquorate Again
Photo: freepik.com 21.08.2023 580

Currently, CCI has a Chairperson and two members. The other member, Sangeeta Verma, is also due to demit office next month.

With the forthcoming retirement of incumbent member BS Bishnoi on Wednesday, the Competition Commission of India (CCI) will again have a quorum. This is likely to affect M&A approvals and foreign direct investment (FDI) proposals risk regulatory difficulties.

Following Bishnoi’s resignation, all eyes are now on the government to see if a new member is appointed in the next few days, sources said.

Currently, CCI has a chairman and two members. The other member, Sangeeta Verma, will also step down next month.

However, some sources pointed out that last time CCI invoked the doctrine of necessity after seeking an opinion from the Attorney General and continued to process M&A approvals despite the lack of a quorum. “The doctrine is a nebulous proposition and the validity of CCI permits can be challenged in court if the orders lack a quorum,”  another source added.

In the open market economy that India has adopted, the Chamber of Industry and Commerce plays a crucial role in promoting fair competition and preventing anti-competitive practices.

It ensures businesses compete on a level playing field, which benefits consumers by leading to better choice, improved quality and competitive prices.

The Chamber of Industry and Commerce enforces the Competition Act 2002 by investigating cases of abuse of a dominant position, anti-competitive agreements and combinations that may have an adverse impact on competition.

This helps create an environment that fosters innovation, efficiency and economic growth while protecting consumer interests.

It should be recalled that following the resignation of former chairman Ashok Kumar Gupta on October 25 last year, the CCI had a quorum for seven months until new chairman Ravneet Kaur took office in May this year.

The Chief Justice of India, the body chaired by DY Chandrachud, had shortlisted candidates for the posts of the three CCI members in May 2023. This came immediately after the center appointed Ravneet Kaur, an IAS official, as full-time chair of the CCI.

The Ministry of Corporate Affairs (MCA) had opened applications for the three CCI membership posts on January 23 this year and set the deadline for applications to be March 9th. In April of this year, however, this deadline for receiving applications was extended to May 1st.

Interestingly, in a U-turn, the April 2023 MCA advertisement made it clear that applications from High Court and District Judges would be accepted for the purpose of assessing, evaluating and selecting candidates for face-to-face exchanges.

However, those applications must be accompanied by copies of 10 judgments they have issued in commercial and complex civil matters, the MCA said in April.

This is significant because in January of this year the MCA kept judges out of the zone of scrutiny for the post of CCI member.

In another important step, the MCA specified in its April notice that applications from attorneys, accountants, cost accountants and company secretaries must include copies of income tax returns for the past three years, as well as copies of ten judgments in which they argued or provided assistance has.

Source:  The Hindu Business Line


Share with friends

Related content