16 deals worth more than Rs 10,000 crore stuck as wait for CCI quorum continues

The Competition Act specifies that there should be at least 3 members to give the nod to deals and the CCI currently has only 2 – acting Chairperson Sangeeta Verma and member BS Bishnoi. (Representative image)

It’s a truly awkward and unenviable phase for India’s anti-monopoly watchdog – the Competition Commission of India, or the CCI. Since the superannuation of its chairperson on October 25, the regulator has found itself without the quorum or required number of members to approve a long list of deals – as many as 16 of them as per the ‘notices under review’ section under ‘combinations’ on the CCI website. Reportedly, the total value of these 16 deals (some of which were filed before the chairperson’s exit) is more than Rs 10,000 crore.

The Competition Act specifies that there should be at least 3 members to give the nod to deals and the CCI currently has only 2 – acting Chairperson Sangeeta Verma and member BS Bishnoi.

Timelines are sacrosanct for mergers & acquisitions considering the dynamic nature of valuations and market conditions, and the current scenario has left the advisory community, especially competition lawyers, with sweaty palms.

“Deal timelines have been hit and many of them involve foreign parties. There is a lot of anxiety on the ground,” a competition law expert shared.

A second lawyer told Moneycontrol, “They (the government) either have to appoint a new Chairperson or a new member to clear the current logjam. The search process should be expedited.”

Both spoke to Moneycontrol on the condition of anonymity.

Let’s take a look at some of the proposed transactions which are in limbo as per the CCI website:

• Dalmia Cement’s (which has pan-India ambitions) purchase of cement and power assets of debt-ridden Jaiprakash Associates
• Private equity major Blackstone’s acquisition of a controlling stake in listed IT services firm R Systems
• Private equity major KKR’s investment in Hero Future Energies
• Saudi Aramco’s buyout of the global products business of Valvoline which sells lubricants, coolants and diesel exhaust fluid in India
• Agri-focused SALIC’s (an arm of the Public Investment Fund, or PIF, of the Kingdom of Saudi Arabia) stake buy in listed player LT foods, which makes the Daawat brand of rice  Interestingly, on January 24, the Ministry of Corporate Affairs (MCA) came out with an official notification extending the tenure of acting Chairperson Sangeeta Verma till further orders or till a new Chairperson is appointed. But this will not solve the quorum dilemma. Verma has been the acting Chairperson of the CCI since Ashok Kumar Gupta demitted office as the full time Chairperson in October.