To prevent red tapism and to improve the ease of doing business in the economic slowdown, government bodies have proposed ways for faster clearance of Mergers & Acquisitions (M&A).
The government’s panel on antitrust regulation reviewed the framework for competition has recommended faster clearance for M&A that do not “stifle competition” in the market. However, the panel remained silent on the curbs placed on the ecommerce retailers by the government.
The competition law review committee led by Injeti Srinivas, secretary of the corporate affairs ministry, submitted a set of recommendations on revamping the competition to finance minister Nirmala Sitharaman. The draft guidelines have been posted on the Competition Commission of India’s (CCI) website, it needs to be approved by the government for becoming operational.
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The panel has proposed to establish ‘a green channel’, approved by CCI, to ensure fast paced clearance for a vast majority of M&As that may not have any major concerns regarding appreciable adverse effects on competition.
M&A’s, referred to as ‘combinations’ in the official statement, resulting from bankruptcy under the Bankruptcy Code will also be eligible for the proposed clearance. However, the panel did not discuss the restrictions imposed on the ecommerce retailers.
Last year, the ministry of commerce and industry had banned online retailers like Flipkart and Amazon, from selling the products of the companies they hold stakes in.
In the notification, the ministry had prohibited ecommerce companies from entering into an arrangement for exclusive sales of products. All online retailers would also have to file for certification along with a report of the statutory auditor to the RBI to confirm the compliance of guidelines. The documentation has to be submitted by September every year for the preceding fiscal year.
At present, the committee is focused on “furthering ease of doing business, encouraging startups and meeting the challenges of the new economy,” reads the official statement. The panel also suggested a ranking system for the states on the basis of the competitiveness of their laws and policies.
The proposal for watchdogs to issue guidelines regarding imposition of penalties for more transparency and faster decision making.