New Delhi, Dec 18 (ANI): The fair-trade regulator, Competition Commission of India (CCI) will soon come out with changes in regulations to ease the process of mergers and acquisitions (M&As), CCI chairman, Ashok Chawla said at an ASSOCHAM event held in New Delhi today.
“We are actively and quickly reviewing regulations, we have called for comments from some of the law firms which have been filing with us and I think before this year ends, which is in the next few days and 2016 starts, we will make further changes on things which have been bothering companies in terms of authorized signatories, invalidation of notices, which has become a matter of concern,” said Chawla while inaugurating 4th National Summit on Mergers and Acquisitions organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
“The idea is to make the regulation and process as user-friendly as possible,” said Chawla. “These are minor nuts and bolts issues but they are very important from the point of view of the stakeholders.”
“So we are taking a look at these and we will be in a position to finalise the changes whatever they are before the end of the month,” he added.
Expressing concerns over time taken in approval of cases due to rise in number of filings and dearth of professionals, Chawla said, “We want that majority of cases which are simple should be cleared expeditiously, so there will be in 2016 a clear southward direction in terms of time taken in which cases are approved.”
“The discipline is that we should clear it in 30 working days, but if you take the total time taken without taking into account clock stop and others, average time taken is about 50-60 days, which according to the Commission is on a higher side, we want to reduce it and try and bring back majority of the cases to within actually 30 days,” said the CCI chief.
He also advised the industry and corporate, particularly the multinational corporations (MNCs) to use the route of e-filing which was recently started to facilitate industry’s interaction with the Commission.
Talking about the M and A regime that has operated during the course of past 4.5 years, Chawla informed that CCI had approved 322 cases out of the total 355 cases that have come up during June 2011 and December 2015 and the balance are in the pipeline.
He said that in less than even one percent of the 355 cases, the CCI felt the need to go into detailed scrutiny of the proposal.
He also said that number of filings have been going up steadily as from 45 in 2013 it had almost doubled to 88 in 2014 and in 2015, till a few days ago it was 117 already. This year, October saw the highest number of filings, which were 21.
He said that almost 98 percent of cases are relatively simpler cases of routine consolidation, sale of shares, intra-group restructuring and others and it needs to be encouraged so that industry and its various sectors reach a scale and size, which are optimum from the economic efficiency point of view.
“So basically the increase is a proxy for improved business climate and the need for consolidation, it will also help in an important way in the overall march towards greater competitiveness of the economy which is extremely important for ‘Make in India,’ programme and policy which the government is pursuing,” said Chawla.
He also said that M and A is a process which is inevitable, is relevant for corporate, which is encouraged from the policy point of view and it should not be seen as a tax-saving or tax-evading instrument. “It is the need of the hour and that is the approach which we in the Commission have been trying to follow.”
On the penalty regime, Chawla said, “There has to be a certain amount of proportionality in terms of penalty that are imposed and the Commission has in recent past been trying to look at that proportionality quite effectively and genuinely but otherwise, practices which fall foul of competition particularly cartel activity need to be curbed with a reasonably heavy hand, more not because of that company but to serve as a signal to others to prevent them from doing what they might be tempted to do.”
“We need enforcement which changes behavior and we also actively pursue advocacy, so the idea is that corporate are apprised of the fact that there is this law which is fairly robust, it can aggressive and therefore, better to prevent anything happening then it be cured later,” further said the CCI chairman. (ANI)