The Competition Commission of India (CCI) was notified with its full merger control powers late last, according to competition lawyers, which would take effect from 1 June.

The notification was circulated yesterday, although a signed copy is not yet available according to Indian law firm competition lawyers.

According to Trilegal competition law senior associate Rahul Singh, the most salient provisions of the combination notifcation are:

(1) Target entity: exemption for an enterprise, whose control, shares, voting rights or assets are being acquired has assets of the value of not more than Rs 250 crores or turnover of not more than Rs 750 crores from the provisions of section 5 of the Competition Act, 2002 for a period of five years;

(2) Group: exemption for the ‘group’ exercising less than fifty per cent of voting rights in other enterprise from the provisions of section 5 of the Competition Act, 2002 for a period of five years;

(3) Effective Date: appointment of June 1, 2011 as the date on which sections 5,6,20,29, 30 and 31 of the Competition Act, 2002 will come into force;

(4) Monetary Threshold Requirements: enhancement, on the basis of the wholesale price index, the value of assets and the value of turnover, by fifty per cent for the purposes of section 5 of the Competition Act, 2002.

Amarchand Mangaldas competition practice principal associate Naval Chopra commented: “Whilst some may assume that India Inc will be happy with the increased thresholds and (limited) exemptions, there remain several issues which will still cause a lot of discomfort.

“The new regulations, for example, allow for a short form filing in case of acquisitions below 15%, intra group transfers, etc. These types of transaction should ideally be exempt from the merger notification requirement but that requires an amendment of the Act. The trigger event for the filing requirement also remains ambiguous.

“The recently issued Government notification creates some ambiguities as well. In particular, in relation to acquisitions by a group which already holds 50% or less voting rights in a target company, it appears to suggest such acquisitions will be exempt from the filing requirement.”

“We hope that the Government considers reviewing and amending Sections 5 and 6 before they take effect on 1 June 2011,” added Chopra.

One competition law firm, under the actual draft regulations certain transactions can be fast-tracked, in the case of acquisitions for not more than 15 per cent of a company solely for investment purposes without change of control, acquisitions where the acquirer already controls the target, acquisitions of assets in the ordinary course of business or investment, intra-group acquisitions, and acquisitions of shares or voting rights as part of bonus issues or sub-divisions of shares.

Filing fees will be Rs 10 lakh ($22,270) for mergers & acquisitions (M&A) below Rs 500 crore ($111m), Rs 20 lakh for transactions between Rs 500 crore and Rs 1500 crore, and Rs 40 lakh for transactions above that or mergers of amalgamation or change of control.

The CCI would have to issue prima facie opinions on mergers with 30 days of filing the notification form, and a final decision no later than 210 days after notification although the CCI should aim for 180 days, according to the law firm’s memo.

The CCI merger control powers have been long-awaited but had faced repeated delays.

Click here to download the draft notification.

Click here to download the draft regulations from the CCI website.

Moneycontrol has a full transcript of an interview with CCI chairman Dhanendra Kumar.

Photo by Mark Strozier