The functioning of the Competition Commission of India may be delayed by more than six months.
After passing of the Competition Act, 2007, in September, Minister of Corporate Affairs Prem Chand Gupta had announced that the CCI would be fully functional by the middle of next year.
But the proposal for employing manpower is yet to be cleared by the Union Cabinet. More importantly, three months after the Act was cleared, the commission is yet to be fully notified so that it can start work.
CCI Acting Chairman and Member Vinod Dhall said, "Recruiting staff can take five-six months. The training, if the programme is approved by the government well in advance, could take another three months. Seen from this light, we still have eight-nine months to go. Even the government has to appoint other members and the chairman of the commission." Dhall's term as member and acting chairman ends in October 2008.
Against an initial requirement of 120 professionals, the CCI has only 26, including Dhall. The Indian Institute of Management, Bangalore, had recommended a strength of 480 professionals, including lawyers, financial analysts and economists. Dhall clarified on the reservations expressed by the industry about cross-border mergers and acquisitions (M&A) which do not have an India impact.
"The M&As need to be notified to the commission only if the merged entity has a 'domestic nexus', that is, assets of at least Rs 500 crore (Rs 5 billion) or a turnover of at least Rs 1,500 crore (Rs 1.5 billion) in India," he said.
Dhall added the CCI was considering that the draft regulations further amplify that both the merging parties should separately have a minimum assets or turnover in India. "This will make it unnecessary for mergers having no effect in India to be notified to the commission," Dhall said.
The industry has also said that the assets or turnover criteria for thresholds is very low. On this, Dhall said the thresholds in the Act were among the highest in the world.
"These thresholds are more than double the size of that in the United Kingdom and three to four times the thresholds in the United States of America," he said.
When asked about the acquisition thresholds, Dhall said, "Acquisition thresholds will cover only large transactions, say 26 per cent of equity or more of the voting rights in the other enterprise."
The CCI is also in touch with industry chambers like the Confederation of Indian Industry, the Federation of Indian Chamber of Commerce and Industry as well as the Institute of Chartered Accountants of India, among others, to address their genuine concerns in the regulations.
The CCI is holding a meeting with representatives of the CII, the ICAI and the Investment Commission this month.
