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The Competition Commission of India (CCI) has issued draft notifications on sections 5 and 6 of the Competition Act 2002 on Tuesday, which empowers the commission to scrutinize majors M&As (Merger and Acquisition) for any breach of the competition law.
On Monday, Cabinet Secretary, KM Chandrasekhar, verified the notifications and sent it for the Cabinet's approval. As per one of the recommendations, the acquirer has to pay a sum of Rs.40 lakhs as fees to CCI, if the total acquisition cost exceeds Rs.1000 crore. Only those cases will get the approval of CCI which have a combined turnover of Rs.3000 crore or combined assets of Rs.1000 crore or more. The time period provided in the act to get an M&A deal approved is 210 days.
The Commission has also stated that after a thorough investigation of any M&A deal, if the CCI orders any modification, the companies would have to comply with the suit within a specified deadline. If failed to comply within the specified time, the deal will be rejected. The companies can appeal against the CCI in Competition Appellate Tribunal. Also as per revised norms set by the government, the company's net assets have to be a minimum of Rs.200 crores or turnover of Rs.600 crore for a CCI scrutiny.