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Aug 22, 2012, 11.05 AM IST
Competition Commission has rejected an application seeking its approval for takeover of Future group's Pantaloon brand business by Aditya Birla Nuvo, as the final deal was yet to be approved by the boards of the concerned companies.
The Competition Commission of India has rejected the notice seeking the nod for the Aditya Birla - Pantaloon deal, reports CNBC-TV18's Malvika Jain.
The case has not been rejected. The notice has been found invalid on the grounds of merits of the case. There is no violation of the Competition Act per se.
Basically, CCI has returned the submission of Aditya Birla Group and Pantaloon on the grounds of the fact that this notice is pre-mature. It has been held to be invalid.
According to CCI, the submission made by these two companies triggers the provisions of Section 6 of the Competition Act. That require a company to seek CCI’s approval post a merger. It doesn't not hold true right now because so far only a memorandum of understanding has been signed by these companies and the boards' approval has not been taken.
On July 16, when these companies had approached the Competition Commission of India, by then a board resolution had not been passed and duly communicated to the Competition Commission of India.
So, clearly for now, the notice has been found to be invalid. But in future once the board of these companies respectively approve proposals, they will be free to approach the Competition Commission of India once again to seek its approval.
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