Companies seeking to amalgamate their wholly-owned subsidiaries (WOS) will no longer be required to seek approval of the Competition Commission of India (CCI), as per the new norms notified by the anti-trust body today.
Also, a CCI notification said companies are not required to file a notice for acquisitions if they are acquiring less that 25% shares or voting rights of another company.
Earlier, any company that sought to acquire 15% shares or voting rights of another company had to seek the Commission's nod.
According to sources, the changes have been done to sync the existing norms with Sebi's Takeover Code which has also revised the open offer trigger point from 15% to 25% now.
Further, the filing fees for companies has been raised. Now, for Form 1, which is the initial scrutiny form, the filing fee has been raised to Rs 1 lakh from the present Rs 50,000 and that for Form 2 (needed for detailed scrutiny) has been be revised to Rs 40 lakh from Rs 10 lakh.
Besides, the CCI has also simplified procedures for filing for acquisitions.
It further said the changes have been made after "gaining experience of implementation of the Combination Regulations", and "with a view to provide relief to the corporate entities from making filings for combinations which are unlikely to raise adverse competition concerns, reduce their compliance requirements, make filings simpler and to move towards certainty in the application of the Act and the Regulations."
From June 1, 2011, all high-value deals came under the CCI scanner. The new regime came to effect with the notification of Section 5 and 6 of the Competition Commission Act, 2002.
According to the provisions in the Act, companies with a turnover of over Rs 1,500 crore will have to approach the CCI for approval before merging with another firm.
Further, only those proposals would need the CCI's nod where the companies have combined assets of Rs 1,000 crore or more, or a combined turnover of Rs 3,000 crore or more, as per the Act.
Also, the target company's net assets have to be a minimum of Rs 200 crore or it should have a turnover of Rs 600 crore for CCI intervention.
The CCI has, so far since June last year, approved 23 merger proposals.
The Commission became fully functional in 2009, with the appointment of a chairman and six members. At present, it has the power to check anti-competitive agreements and abuse of dominant position, drawn from Sections 3 and 4 of the Competition Act, 2002.
