CCI work may be affected by top-level vacancy

A person familiar with the development said less power at the helm of the Competition Commission of India (CCI) could affect the decision-making process in the short term.

The minimum number of members required to approve and approve mergers and acquisitions (M&A) has been reduced since Ashok Kumar Gupta stepped down from the office of chairman on October 25 after completing his four-year term, the person said. requested anonymity.

The anti-trust regulator now has two full-time members, including Sangeeta Verma, who was appointed as the acting chairman for three months or until the full-time chairman takes over. As per the existing rules, in addition to the chairman, the CCI needs two members to have a sufficient quorum to take important decisions.

With fewer top officials, the CCI’s decisions may take longer, given that the search for a new chairman is still on.

Experts said that timely approval of M&A by CCI is crucial for foreign direct investment inflows and unless immediate appointments are made, such approval may be withheld.

The future of the National Anti-Profiteering Authority is also uncertain, as its term ends next month, and the roadmap for the proposed merger with the CCI is still unclear.

Queries emailed to the spokesperson of the CCI and Ministry of Corporate Affairs remained unanswered till press time.

“With reference to the Competition Act, the CCI shall consist of a chairman and at least two other members. Therefore, the functioning of the CCI will be stagnant and can only carry on regular work, which does not involve the rights of the parties,” said Subodh Prasad Dev, Law Partner at the firm Saikrishna & Associates and former Additional Director General of CCI said.

“The prescribed provision regarding the appointment of a chairperson and members should be followed. Any ad-hoc administrative arrangement for the formation of CCI would be open to legal challenges,” Dev said.

Experts said that Section 22 of the Competition Act mandates that CCI meetings be held, details of rules and procedures regarding business transactions during the meetings, and the presence of at least three members are mandatory, as mentioned above. Quoted person said.

“Any delay in the appointment of a new chairman is likely to put a hold on the merger control regime. In the absence of a quorum, the CCI cannot scrutinize the merger notifications.” The government-appointed committee has already interviewed candidates for the post of chairman. The government had invited applications in July.

According to monthly updates on the website of the Ministry of Corporate Affairs, there are over 100 competition-related matters pending at various stages, including investigation and hearing. Mint in its August 29 report said that the average time taken by CCI to clear M&A has now come down to 17 working days.

A set of proposed amendments to the Competition Act, which is currently with a parliamentary standing committee, seeks to fast-track approval for M&A within 20 days of being notified of the deal, if the watchdog does not make an adverse first impression. Is. In addition, according to the proposals, businesses could face harsh penalties for hiding information.