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March 2012 Edition

 

Inside This Issue

Legal Updates (order Summary)

Anti-competitive & Abuse of Dominance- Section 3 & 4

1. Reliance Big Entertainment Vs Producer/Distributors Associations. 2. Re Praveen Kumar Sodhi 3. Haravtar Singh Vs. DLF

Combinations- Section 5 1. Acquisition of equity shareholding of SML Isuzu by Isuzu Japan from

Sumitomo. 2. Amalgamation of TACOCL and TACO 3. Merger of NRL into RITL 4. Acquisition of equity holdings of EIH Ltd by RIIHL 5. Acquisition of equity shareholding of TBSL by TPCL 6. Merger of Legrand India Private Limited (LIPL) with Indo Asean

Electric Pvt Ltd. (IEAPL) 7. Merger of SPIL with RPL 8. Acquisition of SREL by SGPPC 9. Amalgamation of LTHIL and CGL into LMHIL 10. Amalgamation of SOVL into SIIL 11. Merger of ZKSPL into ASPL 12. Amalgamation of Thesys Technologies Private Limited (TTPL) into

Capgemini India Private Limited (CIPL) 13. Amalgamation of Escorts Construction Equipment Ltd (ECEL), Escorts

Finance Investments and Leasing Pvt Ltd(EFIPL) and ESCOTRAC Finance and Investments Ltd (ESCOTRAC) into Escorts Limited (EL) Parties to Combination.

14. Merger of Anusha Investments Limited (AIL) into Sundaram Clayton Limited (SCL):

15. Merger of Viscount Management Services (Alpha) Ltd (VMSA) into Reliance Capital Ltd (RCAP)

16. Merger of DLF Construction Limited (DCL) and DLF Hotels and Apartments Pvt. Ltd. (DHAPL) into DLF Projects Limited (DPL):

17. Merger of Orchid Research Laboratories Limited (ORLL) into Orchid Chemicals and Pharmaceuticals Limited (OCPL)

Market News National News Updates Global News Updates

Compilation by:

Corporate ProfessionalsAdvocates & Solicitors

Competition Law Team

     

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LEGAL UPDATES SUMMARY OF ORDERS Anti-competitive agreements and Abuse of Dominance 1. Reliance Big Entertainment Vs Producer/

Distributors Associations Background: The present case relates to the information filed by number of informants alleging the anti-competitive practices under section 19(a) of the competition Act against several film bodies/associations associated with the business of film distribution and exhibition in different territories under their control. The basic allegations made in all these case are almost same and they are regarding the anti-competitive practices in violation of Secs.3 and 4 of the Act by the OPs. Since the issues in all the 8 cases supra are identical the commission has disposed them by a single order. Allegations: These associations/OPs by virtue of the strength in their area of operations put several restrictions on the producers and distributors as follows: 1. Compelling the producers/distributors/

exhibitors to become their members as a pre-condition for exhibition in their territories

2. Compulsory registration of films as pre-condition to release them in their territories.

3. Discrimination between regional and non-regional films and imposing discriminatory conditions against non-regional films such as putting restrictions on the number of screens and number of shows they can exhibit.

4. undue long hold back period for satellite DTH and other rights in respect of exhibition of films

5. Not allowing the members to deal with non-members punitive actions for the contradiction of which include imposing heavy monetary

penalties, putting on hold the share of the distributors by threatening the exhibitors, warning, reprimand, suspension or even expulsion from the membership.

6. imposing ban/boycott on the producers or distributors in certain cases.

7. Issuing letters to the theatre owners to withhold the share amounts of the producers/distributors.

8. All the above draconic acts and abuse of dominance is carried in concert which can be understood from their memorandum and Articles thus violating the Secs.3 and 4 of the Competition Act.

Observations of CCI on investigation report of DG and its Rulings: 1. The KFCC and other associations/OPs do not

fall under the definition of “Enterprise” within the meaning of Sec.2(h) of the Competition Act,2002 as they are not engaged in any economic activity They only regulate their constituent members who individually are engaged in the production, distribution and exhibition of the films .

2. Once the associations are not the enterprise they cannot be examined under Sec.4 of the Act.

3. Coming to violation of sec.3 The collective intent and behaviour of various associations as observed from the restrictive provisions of the Articles and Memorandum of Associations prohibiting the non-members from the conduct of business of film distribution and exhibition in the territories of the respective associations and prohibition of members from dealing with the non-members backed by punitive actions like suspension or cancellation of membership , monetary penalties etc constitute a horizontal agreement under sec.3(3) and it prevents competition between the members and the non-members who are otherwise competitors in the relevant market of distribution and exhibition of films in the areas under the control of the associations.

4. Restrictions such as requiring compulsory membership of the informants for the exhibition

Section 3&4

     

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of their films, compulsory registration of the films for the same Restriction on number of screens, number of shows and hold back restrictions, backed by disciplinary actions for their violations arising out of the agreement among members, limit the supplies and distribution of the films, foreclose competition by hindering entry into the market and are thus violations of the Sec.3.

5. The rules and regulations are also anti-competitive in terms of Sec.19 (3) as they not improving the market performances but on the contrary are restricting and limiting the market. They are not contributing to the improvement in the production or distribution of the films or the technology in any way but are driving the competitors from the market and foreclosing the market. The consumers are also not benefitted conversely deprived of watching movies of their choice

6. Thus the OPs other than Telangana Film chamber of Commerce , Chennai Kanchipuram Thiruvallur Districts Film distributors association and Orissa Film distributors syndicate as no evidence against them is proved during the investigation, have contravened Sec.3(1) by causing AAEC in terms of Sec.19(30 of the Act.

7. Since the OPs are not having the turnover of their own the penalties for their anti-competitive acts in terms of Sec.27 of the Act shall be imposed on their annual receipts other incomes from the members and non-members for the three preceding years @ of average of 10% which is different for different association the total howsoever amounted to 46 lakhs to be deposited by the said associations within 60 days of this order.

8. Also the associations should cease and desist from the said anti-competitive practices by amending the anti-competitive clauses in their Memorandum and Articles of Association within 3 months of this order.

Case No.25, 41,45,47,48 and 50/2010.- Order passed on 16th February, 2012

CP Comments: 1. Though the OPs have contended that their

acts were in the interests of their members they could not prove against the fact that they are infringing the interests of the non-member competitors which becomes the concern for the commission.

2. The commission also in case No. 1 of 2009 (FICCI Multiplex Vs UPDF & Otrs.) held the activities of the film associations which caused limit in the supply of films to be anti-competitive under Sec.3 (3)(b) of the Act.

3. No vertical agreement in terms of Sec.3 (4) is observed as the associations themselves are not engaged in the production or distribution of goods or services.

4. Similarly the acts of the associations cannot be said to construe “Refusal to Deal” under Sec.3(4) as it would involve agreement between the players operating at different levels of production or supply chain which the OPs are not in the case under consideration. 201

2. In Re Praveen Kumar Sodhi

The present matter relates to anti-competitive practices and abuse of dominant position by the Real Estate Developers. Facts of the Case: As per the information provided by the informant, in February, 2005 the informant has booked a residential flat in the tower RICHMOND of the group housing project Omaxe Hills promoted by the OPs at Faridabad, the allotment of which was confirmed by the OP No.1 on 12.09.2006. In May, 2007 the informant at the behest of the OP1 has also signed the Buyers agreement and returned the same. Subsequently in 2010 when the informant approached the OP 1 seeking the date of completion of the flat as it is not finished by 2010 as promised, the OP demanded a further payment of Rs.500,000/- from the informant threatening him

     

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with the cancellation of the booking if the said amount is not paid forthwith. Later when the informant visited the office of the OP 1 he was informed that his booking for the flat No.604 of Richmond has been cancelled and in lieu of that he will be allotted flat in another tower namely WINDSOR. Allegations: 1. The possession of the flat has not been handed

over in 2009 as per earlier promise and there is no manifest probability of giving them even by 2012.

2. Changing of the plan, floor, flat and building by the OPs after receiving handsome amount of advance from the informant and without the prior notice or approval of the informant is fraudulent.

3. Since the OPs are in dominant position , they are abusing the same by threatening the informant with forfeiture of huge amount deposited by him as an advance in case of his non-acceptance to the change of the flat.

4. A new agreement for the allotment of another flat is violative of Sec.3 of the Act.

CCI Ruling: No violations under Sec.3 or Sec.4 as alleged or under any other section of the Act are observed in this case and hence the case is liable to be closed forthwith without further investigation, due to the following reasons: 1. The OP is not in dominant position in the

relevant market of real estate in Faridabad as it has not enjoyed any position of strength in the relevant market which enabled it to operate independently of competitive forces in the relevant market nor it could influence the competitors or consumers or the market tin its favour and the informant also has not provided any evidence in terms of Sec.19 (4) of the Act in substantiation of the said allegation.

2. With regard to the allegation of violation of Sec.3 envisages the agreement between the enterprises in the same line of business or at different levels in the production chain and the

end user is nowhere in the production chain and therefore the agreement between the OPs and informant as consumer is not the subject matter of Sec.3 and hence no violation of Sec.3.

3. This is a consumer dispute and not a competition issue.

4. Moreover the informant has already invoked arbitration clause and moved the case in the competent court which appears to be pending with the Id.ADJ, Faridabad and therefore the commission cannot look into the same.

Case No. 83/2011- Order passed on 21st February, 2012. CP Comments: 1. Consumer disputes without any apprehension

of competition breakdown are not the concern of the Competition Commission though that may be damaging for the consumers. Though consumer protection is one of the objectives of the competition law, it is concerned with the protection of the consumers in general from the anti-competitive practices of the firms in the markets but not with every individual consumer grievances.

2. The commission can act only by strictly adhering to the parameters as provided in the various provisions of the Act. So in the absence of proof that the OP is in dominant position, no action can be taken against it even though it behaves in a manner akin to abuse of dominance.

3. In case of DLF Limited, Commission passed an order on almost similar facts but where the OP has been proved to be abusing their dominant position by blocking the consumer through Flat Buyers Agreements signed coercively after collecting huge sum as booking amount on its name. The agreements further provides for the clause of forfeiting the booking amount in case the buyer opts out and not buying the flat which amounts to the abuse of dominance as it bars the access of the consumers to other players and also bars the

     

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other players from accessing the said allottee-consumers. For this purpose even the concept of “after market abuse” has been imported from the Kodak case of US.

3. Haravtar Singh and Gurjit Singh

……Informants Vs DLF Opposite Party The present matter relates to the complaint filed by the informant alleging abuse of dominance position by the OP. Facts of the Case As per the information provided by the informants in two separate but similar cases above one by the husband and the other by his wife, the informants booked two apartment units in the project ‘Belaire’ situated at DLF City, Gurgaon, Haryana in the year 2005 and paid the down payment of Rs.2,000,000 each and were allotted 9th and 14th Floors in Blocks D and E respectively. Later on 10.5.2007 the Op sent the notices demanding them to pay a further payment of Rs.25,88,770 by the informant 1 and Rs.26,73,370 by the informant 2 by 3.06.2007 which the informants did not comply. Thereupon the OP has kept issuing on the reminder notices to the informants for the said amount even after it has communicated them the delay in the commencement of the project through its letter dated 27.07.2007. When the informants failed to respond to its notices it has sent the cancellation letters on 22.02.2010 without giving the prior notice of the same and forfeited the huge payments made by them earlier. Allegations: 1. That the OP have received advances much in

advance without obtaining the prior approvals of the appropriate authorities for the said project.

2. The allotment agreement contains a safety clause for the OP that in case the OP is not able to handover the possession within a year for any reason including the non-sanction of the building plan by the authorities the DLF would be responsible to the applicants only to refund the down payments with simple interest of 9% p.a. thereon.

3. However for the delay in the payment of instalments (which were in view of the non-commencement of the project) by the informants penal interest is imposed.

4. The agreement was unilateral and lopsided in favour of the OP and against the interests of the informants and the informants was forced to sign the same without the opportunity of negotiating the terms contained therein.

Observations of CCI The commission after considering the DG’s investigation report in this matter has disposed of the case as in the case of Mili Marketing Pvt Ltd (Case No.55 of 2010) in respect of which the commission has passed an order on 14.11.2011 disposing the same stating that no separate order in this case is required as not only the facts and circumstances of this case but the subject matter and the OP of this case are also absolutely same as that of the Belaire Owners’ Association case (Case No.19 of 2010)in respect of which the commission has already given penalty to the common OP of these cases i.e. the DLF by its order dated,12.08.2011. Case No. 43 and 44/2011- Order passed on 31st January, 2012 CP Comments: 1. In Belaire’s case, the Commission observed

the abuse of dominant position of DLF through signing of the buyers agreement with the allottees after collection of the booking amount from them. The terms of the agreement are found unilateral in the manner favourable to the DLF and detrimental to the Flat owners.

     

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The terms again provides for the clause for forfeiture of the booking amount where any of the allottee decides to opt out and nopt buying the flat.

2. The only difference in the Belaire case and the present case, as also observed by the commission is that in the former one the informants signed the agreement whereas in this case they refused to sign the agreement for which their advances have been forfeited.

3. Moreover the two subsequent cases establish the fact that the DLF is continuing its abusive acts even after being penalized with a huge penalty of Rs.630 Crores by the commission in Belaire case notwithstanding that the same is pending before CAT, which requires the CAT to consider before taking any lenient view on the DLF, in the interest of the consumers

SUMMARY OF ORDERS Combinations (Mergers &

Amalgamations)

1. Acquisition of equity shareholding of SML

Isuzu by Isuzu Japan from Sumitomo–

Parties to Combination Acquiring Company Isuzu Japan: A company incorporated in Japan and engaged in the business of manufacturing and sales of commercial vehicles including buses, trucks, power trains, industrial and marine engines, pickup trucks and sports utility vehicles and engine components in Japan and Overseas. It provides technical assistance and licences to SML Isuzu enabling it to manufacture, sell, repair and maintain vehicles in India. It also exports engine injection nozzles and fixing parts to an Original Equipment Manufacturer (OEM).

It holds 4% of Equity Capital of SML Isuzu. Contractee Company to Share Purchase Agreement Sumitomo Corporation: It is a Company incorporated in Japan having its operations across the world. Sumitomo exports and sells auto components i.e. power trains and chassis components to SML Isuzu, which are procured from Isuzu (Japan), customized to suit the needs and designs of SML Isuzu. It holds 54.96% of equity capital of SML Isuzu. Target Company SML Isuzu: It is a company incorporated in India and listed on NSE and BSE and is engaged in the business of manufacture and sale of commercial passenger and goods carrying vehicles primarily for the domestic market in India. Facts of the Case The Combination relates to acquisition of additional 11% equity shares of SML Isuzu under Section 5(a) of the Competition Act 2002 from Sumitomo thus increasing the aggregate holding to 15% pursuant to Share Purchase Agreement and a Shareholders Agreement. On 22nd December, 2011, a notice of proposed combination, was jointly filed by SML Isuzu Ltd of India and Isuzu Motors Ltd of Japan (Isuzu Japan) and Sumitomo before Competition Commission of India has received under Section 6(2) of the Competition Act The proposed combination pertains to automotive industry in India comprising of the automobile ad auto component sectors. Ruling of CCI

Section  

5 

Section 5

     

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The commission has passed an Order approving the combination without any compunction recording the following reasons:

1. Neither Isuzu (Japan) nor Sumitomo is engaged in manufacture and sale of commercial vehicles in India and share of SML Isuzu in the market is not considerable (in single digit).

2. Market share of Isuzu (Japan) and Sumitomo in the auto component sector is negligible and also during the financial year 2010-11, of the total only 3.83% of auto components including the components from Sumitomo are imported for manufacturing of commercial vehicles. Thus the parties are not engaged at different levels of production in a substantial manner.

Combination Registration No- C-2011/12/17- Order passed on 2nd February, 2012. CP Comments It is pertinent to note that since the present case relates to acquisition of equity shareholding of the target company aggregating 15% of its total equity capital, the matter falls under exemption under clause I of schedule I of Combination Regulations 2011 Thus no notice is required to be filed for the proposed combination with the commission under Section 6(2) of the Competition Act 2002 This was not considered by the Commission in its order. . 2. Amalgamation of TACOCL and TACO

Parties to Combination: Amalgamating Company Taco Composites Limited (TACOL). It is an unlisted public limited company incorporated under the companies Act, 1956. It is

the wholly owned subsidiary of TACO which in turn is the subsidiary of Tata Sons and is engaged in design and development and moulding, painting, assembling and sequencing of various parts manufactured by using sheet moulded composites and bulk moulded composites used in several sectors such as transport, automotive, electrical, electronics, telecommunications building and construction companies with specialization in fenders, bumpers engine hoods for commercial vehicles and tractors, compound for electrical appliances and headlamp reflectors. Amalgamated Company Tata Autocomp Systems Ltd (TACO). It is an unlisted public limited company incorporated under the companies Act, 1956 and is engaged in design and development and moulding, painting, assembling and sequencing of plastic parts for commercial vehicles, automobiles, two-wheelers, three-wheelers, bulldozers and excavators etc., mainly dealing in gears, axles, joints, springs, chains, frames, chassis, engines, goods, appliances, apparatus, equipment, components and accessories and also provides services such as engineering consultants, technical advisors, supply chain logistics etc in the after sale services of its products and the activities incidental thereto. Facts of the Case On 2nd January, 2012 TACOCL and TACO have filed a joint notice under sec.6(2) of the Act regarding the proposed amalgamation falling under section 5(c) of the Act, of the former into latter in accordance of sections 391 to 394 of the companies Act and in pursuance of their respective Board resolutions dated 15th December, 2011. CCI Ruling The CCI approved the proposed combination observing the same not resulting into AAE on the competition in India considering the following facts:

     

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1. Products/ Services of TACOL and TACO are not similar or substitutes to each other.

2. Ultimate control over the affairs of TACOL remains with TACO subsequent to the scheme of amalgamation.

Combination Registration No- C-2012/1/18- Order passed on 2nd February, 2012 CP Comments:

The combination regulator has granted its clearance to the amalgamation as competition friendly as this is not the amalgamation of the rivals in the same line of business but only a fusion of the parent and the subsidiary to enhance the size and operations and to achieve economy and efficiency. Also the proposed combination is created within the group where there is no change in control of affairs. Further Commission considering the number of cases of amalgamations effecting within the group and not having any appreciable adverse effect on competition has exempted the intra group mergers of holding company with its subsidiaries wholly owned by enterprises vide Competition Amendment Regulations 2012.

3. Merger of NRL into RITL Parties to Combination: Amalgamating Company Netizen Rajasthan Limited (NRL) It is an unlisted public limited company incorporated under the companies Act, 1956 and is a wholly subsidiary of RITL which holds its 100% Equity capital.NRL holds movie rights acquired from various distributors which have been capitalized as intangible assets and is not engaged in any other business activity except investment. Amalgamated Company

Reliance Infratel Limited (RITL) It is an unlisted public limited company incorporated under the companies Act, 1956 and is engaged in building, owning and operating telecommunication towers, optic fibre cable assets and related assets and to provide these assets on a share basis to wireless service providers and other communication service providers under long-term contracts Facts of the Case The Competition Commission has received a notice under section 6(2) of the competition Act, on 24th January, 2012, filed by RITL and NRL, in relation to the proposed merger of NRL into its parent company RITL encompassed under Sec.5(c) of the Competition Act. The Objective of the combination: As provided in the notice the intended merger is aimed at reducing costs and multilayer inefficiencies and achieving operational and managerial efficiencies Ruling of CCI The CCI approved the proposed combination observing the same not resulting into AAE on the competition in India considering the following facts: 1. NRL is not engaged in any business except the

investment. 2. There is no change in control over the activities

of NRL subsequent to the implementation of scheme of amalgamation.

3. The purpose of proposed combination is to reduce administrative cost, removing multiple layer inefficiencies and for achieving operational and management efficiency.

Combination Registration No- C-2012/01/25 - Order passed on 2nd February, 2012 CP’s comments:

     

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1. The object of Competition law is promotes competition and restricts/ prohibits practices which are likely to have appreciable adverse effect on competition. As in the present case, since there is no change in control or market share of the acquirer pursuant to the proposed scheme of amalgamation, the same would not be having any appreciable adverse effect on competition.

2. Further Commission considering the number of

cases of amalgamations effecting within the group and not having any appreciable adverse effect on competition has exempted the intra group mergers of holding company with its subsidiaries wholly owned by enterprises vide Competition Amendment Regulations 2012.

4. Acquisition of equity holdings of EIH Ltd by

RIIHL Parties to Combination Acquirer Company: Reliance Industries Investment and Holding Ltd (RIIHL): RIIHL is a wholly owned subsidiary of Reliance Industrial Investments and Holding Ltd (RIHL) which in turn is a wholly owned subsidiary of Reliance Industries Ltd (RIL) which along with all its controlled subsidiaries is referred to in the notice as acquirer group. As per the notice, the acquirer group i.e. RIL along with all its subsidiaries is a diversified conglomerate having interest in oil, gas, petroleum and refining and marketing petroleum products, petrochemicals (polyester, fibre intermediates, plastics and chemicals), textiles etc RIIHL currently holds 14.80% of the equity share capital of EIH. Target Company

EIH: It is a company incorporated under the Companies Act and is primarily engaged in the business of ownership, management and operation of Hotels and cruise ships in India and abroad. Facts of the Case The combination relates to acquisition of 10.19% of paid-up equity share capital of EIH Ltd (EIH) by RIIHL, by way of direct or indirect acquisitions through market purchases on the stock exchanges and/or through private arrangements in one or more tranches within a period of 24 months from the approval by the commission. The transaction is covered under Sec 5(a) of the Competition Act. The post acquisition equity shareholding of RIIHL in EIH will be 24.99%. Observations of CCI The planned acquisition is not in any way deterring competition concerns and therefore is justified to be approved.

1. Neither RIIHL nor the acquirer group is engaged in the business of hospitality services in India nor they have directly or indirectly have any interest/ investment in any other enterprises engaged in business of hospitality services in India.

2. The proposed combination would not be resulting acquisition of any control over EIH or any change in the Board of Directors or management of EIH.

Combination Registration No- C-2012/01/22 - Order passed on 14th February, 2012 CP Comments: Under the Combination Amendment Regulations, 2012, the limit of acquisition of share holding for exemption from the filing of notice in respect of the transactions of the above nature has been increased from 15% to 24.99% and therefore the present transaction would have been exempted

     

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from the requirement of filing of the notice had it been filed after February 23rd, 2012 (the date of the amended regulations). The amendment is made in the regulation with a view to correspond it with SEBI Takeover Regulations. 5. Acquisition of equity shareholding of TBSL

by TPCL Parties to Combination Acquiring company Tata Power Company Ltd (TPCL): It is a company incorporated under the companies Act, 1913 and listed on BSE and NSE and is engaged in generation, transmission, distribution and trading of power. Acquired company: Tata BP Solar India Ltd (TBSL) Is a public listed company incorporated under the Companies Act, 1956 and engaged in the design, development, manufacture, marketing and after sale services of solar cells, solar modules, solar power generating systems, solar power heating systems, construction and maintenance of solar power plants. Facts of the Case On 27.01.12 the CCI has received a notice pertaining to the proposed Acquisition of further 51% of the paid-up capital of TBSL by TPCL which already holds 49% of paid-up capital of TBSL from the current holder, BP Alternative Energy holdings (BP Holdings), pursuant to the share purchase agreement between the three. By the said acquisition the TPCL becomes 100% holder of the TBSL. Further it has been stated in the notice that in the event TBSL issues any shares to BP holdings then TPSL will also acquire those securities, as the part of the proposed combinations.

The objective of the intended Acquisition as per the notice is the rapid expansion of TPCL in the growing energy sector in India. TPCL and TBSL are not engaged in the production, distribution, or otherwise dealing in similar or identical goods or services. Further the solar power generated by the TPCL using the TBSL’s commissioned solar power plants amounts only to 24% of the total solar power generated by using the TBSL commissioned solar power plants and is less than 1 % of the total power generated by TPCL. TPCL and TBSL are engaged at different levels of production in different markets of generation of electric power including solar power as the TBSL manufactured products are used by TPCL for the conversion of solar energy into electric energy. But their individual or combined market share in the respective markets is not substantial. Observations of CCI CCI approved the Acquisition as the one not hindering competition.

1. TCPL and TBSL are not engaged in production, supply, distribution, storage, sale or trade of similar or identical or substitutable goods or provisions of services.

2. Their individual or combined shares in the respective markets involving engagement at different stages or levels of the production chain are also not substantial.

Combination Registration No- C-2012/1/26- Order passed on 14th February, 2012. CP Comments: 1. Vertical integrations with insignificant effect

on market as in this instant case are not considered to antagonize competition.

2. Further the transaction is not resulting in the change of control but only in the conversion of joint control into sole control.

     

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6. Merger of Legrand India Private Limited

(LIPL) with Indo Asean Electric Pvt Ltd. (IEAPL)

Parties to Combination Amalgamating Company Legrand India Private Limited (LIPL): Is a private limited company incorporated under the provisions of the Companies Act, 99.99% of shares of which are held by B. Ticino S.P.A Italy which is a wholly owned subsidiary of the Legrand Netherland BV and the remaining 0.01% is held by the Legrand Netherland BV which in turn is the wholly owned subsidiary of Legrand France and LIPL is engaged in the manufacturing and trading of low voltage electric products and digital systems in the premium segment Amalgamated Company Indo Asean Electric Pvt Ltd.(IEAPL): It is private company incorporated under the companies Act, 55.55% of share capital of which is held by Legrand Netherland BV, 44.44% of its share capital is held by LIPL and the remaining share capital is held by Legrand France and is engaged in the manufacturing and trading of electric products in the medium and low cost segment. Further LIPL has an agreement with IEAPL for purchase of Legrand brand electrical low voltage miniature circuit breakers (MCBs) wiring devices etc. manufacture by IEAPL and to supply the components for the manufacture of the MCBs and wiring devices until the IAEPL is able to manufacture or procure the components from the market. Facts of the Case On 3rd February, 2012 the commission received the notice under Sec.6 (2) of the Act in respect of

the proposed merger, in terms of a scheme of arrangement under Companies Act 1956 of Legrand India Private Limited (LIPL) with Indo Asean Electric Pvt Ltd. (IEAPL) falling under sec. 5(c) of the Act, filed jointly by the parties to the said combination. Observations of CCI The Combination under consideration is not likely to mitigate competition and hence approved since both the entities, LIPL and IEAPL are part of the same group Legrand and also 100% of their capital is held by their ultimate holding company directly and indirectly, so there is no change in control pursuant to the Combination.

Combination Registration No- C-2012/2/32- Order passed on 14th February, 2012. CP Comments: Both LIPL and IEAPL forms part of the same group prior and post combination with 100% of the share capital being held by Legrand France either directly or indirectly, so there is no change in control and market share. The business and market share of the Parties to the combination is immaterial, where in there is no change in control pre and post combination. This notice would have been exempted under clause 8A of the Combination Amendment Regulations, 2012 had it been effected after the coming into force of the amendment regulations. 7. Merger of SPIL with RPL Parties to Combination Amalgamating Company Sasan Power Infrastructure Ltd (SPIL): SPIL is a wholly owned subsidiary of RPL incorporated under the provisions of the

     

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companies Act and is not currently carrying any business except holing investments in the Group companies. Amalgamated Company Reliance Power Ltd (RPL): RPL is a company incorporated under the companies act, 1956 and is engaged in development, construction and operation of power generation projects and development of coal mines associated with such projects. Facts of the Case The competition commission of India has received the notice under Sec 6(2) of the Act on 01.02.2012 in relation to the proposed merger between the aforementioned parties which falls under Sec.5(c) of the Act. Observations of CCI CCI has approved the intended combination as it is not likely to have an AAEC.

1. There is no change in control pre and post combination.

2. SPIL is not carrying on any business activity.

Combination Registration No- C-2012/02/29- Order passed on 15th February, 2012. CP Comments: The object of scanning any combination under the competition law is always from the angle that whether the said combination results in the increase in the market size of the parties thereto by virtue of horizontal integration effected through the said conglomeration so as to fetch them dominant position in the market which can be abused by them later. In the instant case the company being merged is the wholly owned subsidiary of the acquirer and

moreover has no business except holding the investment of the acquirer and therefore the merger in question will not result in the change of control or in the increase of the size of the business of the acquirer so as to be skeptical form the competition angle. Also the intra group mergers among holding companies and subsidiaries wholly owned by the enterprises belonging to the same group have been made exempt by the Competition Commission of India considering their negligible effect on competition and increase in number of applications. 8. Acquisition of SREL by SGPPC Parties to Combination Acquirer Company: Saint-Gobain Produits Pour La Construction S.A.S (SGPPC) SGPPC is the company incorporated in France and is a part of global Saint-Gobain group the ultimate holding company of which is Compagnie de Saint gobain, incorporated in France. Saint-Gobain group has presence in four broad business sectors namely innovative materials, construction products, building distribution and packaging. SGPPC is engaged in the business construction products sector and is active in manufacturing ductile iron pipes and cast iron pipes outside India including cast iron waste water and rain water drainage systems for buildings DI pipe systems, fittings and accessories and DI manhole covers for drinking water systems, irrigation systems, sewage systems etc. Target Company Shri Ram Electrocast Limited (SREL) SREL is a company incorporated in India and is engaged in the manufacture and sale of pig iron.

     

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Facts of the Case On 9th January, 2012 the commission received the notice filed under sec.6(2) filed by Saint-Gobain Produits Pour La Construction S.A.S(SGPPC) in respect of the proposed Acquisition by SGPPC of 95% of Equity Share Capital of SREL from Electrotherm India Limited (EIL) and 5% of Equity Share Capital from Shri Hans Paper Ltd (SHPL) in pursuance of share sale and Purchase Agreement and Share Subscription Agreement executed between the four of them. The Share Purchase and Subscription agreement also contain a provision according to which the ductile iron pipe manufacturing business of EIL shall be transferred to SREL before SGPPC acquires shares of SREL. Therefore for the purpose of Sec. 5, the value of assets and turnover of EIL has also been attributed to the value of assets and turnover of SREL. From the facts above it is observed that SGPPC or the entities controlled by it have no place of business in India in relation manufacture and sale of DI pipes in which EIL is engaged nor they are engaged in the business of pig iron in which EIL and SREL have business. Observations of CCI The combination is not likely to have any adverse effect on competition in India and hence approved.

1. SGPPC and other Companies belonging to the Saint Gobain Group and SREL are not engaged in the similar business activities in India.

2. EIL and SREL are engaged in the business of pig iron in India, where SGPPC does not have any presence.

Combination Registration No- C-2012/1/19- Order passed on 16th February, 2012. CP Comments: The transaction involves the acquisition of 100% share capital of SREL, an Indian company from its share holders EIL and SREL holding 95% and 5%

respectively, by SGPPC, the company based in France. The Combination is not conglomeration of like businesses and having presence in India. So no competition threat is felt by the commission. The commission while considering the application has also attributed the value of assets and turnover of EIL with the assets and turnover of SREL, the iron ore manufacturing unit of which is subject to transfer to SREL as per the acquisition terms, since the transaction involves transfer of business in favour of Acquired Company. Commission further considering the need also inserted the clause as sub-regulation 9 in regulation 5 of the Combination Regulations vides amendment dated 23rd February 2011. Also the proposed acquisition will cause infusion of foreign exchange in India in the form of foreign direct investment. 9. Amalgamation of LTHIL and CGL into

LMHIL Parties to Combination Amalgamating Companies: Loop Telecommunications Holdings India Ltd (LTHIL): It is an unlisted public company limited incorporated under companies act, 1956 Capital Global Ltd, Mauritius (CGL): It is a private ltd company incorporated in Mauritius Amalgamated Company Loop Mobile Holdings India Ltd (LMHIL): It is an unlisted public company incorporated in India. LMHIL holds 100% Equity share capital of CGL and more than 90% of the share capital of LTHIL. Facts of the Case

     

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On 27th January, 2012 the CCI has received the notice under Sec. 6(2) of the Competition Act pertaining to the intended Amalgamation of LTHIL and CGL into LMHIL falling under Sec. 5(c) of the Act pursuant to Companies Act 1956. CGHIL is the wholly owned subsidiary of LMHIL and LHTL also is the subsidiary of LMHIL and all the three belong to same group “Loop”. The objective of the said amalgamation is restructuring of the group ‘Loop’ rationalize investments, reduce shareholding tiers, reduce costs and to achieve synergic operational economies. Observations of CCI No adverse affect on competition is perceived by the commission from the proposed combination since all the companies to the combination belongs to the same group and neither of the parties to the amalgamation is engaged in any business except holding investments within the group and they do not have any turnover or operations either in India or abroad. The Combination was approved by the Commission. Combination Registration No- C-2012/1/27- Order passed on 21st February, 2012. CP Comments: The fact that none of the entities are engaged in any business itself is evident that proposed combination cannot pose any threat to competition. Also the parties to the combination belong to the same group and there is no change in control. 10. Amalgamation of SOVL into SIIL Parties to Combination

Amalgamating Company: Sterlite Opportunities and Ventures Ltd (SOVL): It is an unlisted public limited company and is a non-deposit taking Non-banking Finance company and deals in investment in shares of the group companies. It holds 64.92% of equity shares of Hindustan Zinc Ltd as an investment. SOVL is a wholly owned subsidiary of SIIL Amalgamated Company Sterlite Industries (India) Ltd (SIIL): It is a listed pubic company incorporated under Companies Act and is engaged in the mining of copper, zinc, lead, aluminium; production of copper cathode, copper rods, refined zinc rods and rolled products made of aluminium; generation of thermal power and wind power for commercial purpose and construction of coal berth. Facts of the Case On 2nd February, 2012 the CCI received the notice under Sec 6 (2) of the Competition Act filed jointly by SOVL and SIIL regarding the intended amalgamation falling under Sec. 5(c) of the Act. Condoning the delay in filing the notice at the request of the parties the commission has allowed the application, however the commission decided to initiate proceedings separately under Sec.43 A for the belated filing of the notice. Observations of CCI The commission has approved the same as not likely to have any adverse effect on the combination. 1. SOVL is a wholly owned subsidiary of SIIL and

the objective the proposed amalgamation is to enhance the financial strength reduce the administrative cost of the holding company.

     

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2. No change in the control of SOVL which is vested with SIIL both pre and post combination.

Combination Registration No- C-2012/02/30- Order passed on 21st February, 2012. CP Comments: Also the intra group mergers among holding companies and subsidiaries wholly owned by the enterprises belonging to the same group have been made exempt by the Competition Commission of India considering their negligible effect on competition and increase in number of applications vide Combinations Amendment Regulations 2012 dated 23rd February 2012. 11. Merger of ZKSPL into ASPL Parties to Combination Amalgamating Company Zenta Knowledge Services Private Limited (ZKSPL) It is a private limited company incorporated under the companies Act and is a wholly owned subsidiary of ASPL and is engaged in the business of providing services such as analytical review, data aggregation, support and other services. It is registered under Software Technology Parks of India (STPI) scheme and under Special Economic Schemes (SEZ) Act Amalgamated Company Accenture Services Private Limited (ASPL) It is a private limited company incorporated under the companies Act and is engaged in the business of providing management consultancy and information technology and information technology enabled services to its clients. It is registered under Software Technology Parks of India (STPI)

scheme and under Special Economic Schemes (SEZ) Act Facts of the Case On 10th February, 2012 the commission received notice under Sec. 6(2) of the Competition Act filed by ZKSPL and ASPL regarding the merger of ZKSPL into ASPL under Sec. 5(c) of the Act as per the scheme pursuant to Companies Act 1956. Both parties to the combination are significantly engaged in export of services to entities abroad and the objective of the combination is to secure economies of scale. Observations of CCI Since the amalgamating entity is wholly owned subsidiary of the amalgamated entity, there is no change in control and market share, no adverse affect on competition in India can be made out from the planned combination. Combination Registration No- C-2012/02/34- Order passed on 21st February, 2012. CP Comments: Merger of wholly owned subsidiary with its Holding company like the above is now exempted under the amended combination regulations vide Clause (8A) which is newly inserted after 23rd February 2012. Nevertheless the combination in question is not a threat to the competition in India as there is no change in control pre and post combination and also the businesses are mainly export oriented which do not pose any threat to the competition. 12. Amalgamation of Thesys Technologies

Private Limited (TTPL) into Capgemini India Private Limited (CIPL)

Parties to Combination

     

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Amalgamating Company Thesys Technologies Private Limited (TTPL): It is a company incorporated under the companies Act and is a wholly owned subsidiary of CIPL and is not engaged in any commercial activity in directly India. It has investments in overseas in Thesys Technologies Middle East FZE, Ajman and Thesys Technologies LLC, Dubai both the companies having activities outside. Amalgamated Company Capgemini India Private Limited (CIPL) It is a company incorporated under the companies Act in India and is engaged in providing information technology related consulting, technology and outsourcing services including application, development and integration, business intelligence, infrastructure and security, mobility transformation and software and quality management testing Facts of the Case On 10th February, 2012 the commission received the notice under Sec. 6(2) of the Competition Act, of the proposed amalgamation under Sec.5(c) of the Act, of TTPL into CIPL pursuant to the scheme under Companies Act 1956. Condoning the delay in filing the notice at the request of the parties the commission allowed the application, however the commission decided to initiate proceedings separately under sec.43 A for the belated filing of the notice. The parties are engaged in software exports and TTPL is the wholly owned subsidiary of CIPL and the control of TTPL prior to and post combination is with CIPL. Observations of CCI: The planned combination is approved since there is no effect on competition in India

1. Both the entities are primarily engaged in business of software exports.

2. There is no change in control pre and post combination.

Combination Registration No- C-2012/02/36- Order passed on 23rd February, 2012. CP Comments: Promotion of technical, scientific and economic development by means of production and distribution of goods or services or provision of services is considered to dilute the effect of AAEC under Sec.19 of the Act while considering the factors contained therein for determining Appreciable adversely affect on completion(AAEC). So in the present case the provision of services and thereby developing software technology and economic development is a competition-friendly affair and the combination is only of WOS which is not having any business in India into its Holding company which is very unlikely to increase the market share of the absorbing company so as to hinder the new entrants or hamper the competition. Moreover under the newly amended combination regulations it is exempted from notice requirements under Clause (8A) of the Schedule I. 13. Amalgamation of Escorts Construction

Equipment Ltd (ECEL), Escorts Finance Investments and Leasing Pvt Ltd(EFIPL) and ESCOTRAC Finance and Investments Ltd (ESCOTRAC) into Escorts Limited (EL) Parties to Combination.

Amalgamating Companies Escorts Construction Equipment Ltd (ECEL): It is an unlisted public company incorporated under the companies Act in India and it is 100% of EL and is engaged in the manufacture of material

     

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handling construction equipment and earth moving equipment Escorts Finance Investments and Leasing Pvt Ltd (EFIPL): It is a private limited company incorporated under the companies Act in India and is a non-deposit taking NBFC registered with RBI. It is an investment holding company and primarily holds investment. ESCOTRAC Finance and Investments Ltd (ESCOTRAC): It is a private limited company incorporated under the companies Act in India and is a non-deposit taking NBFC registered with RBI. It is an investment holding company and primarily holds investment. Amalgamated Company Escorts Limited (EL) It is a listed public company incorporated under the companies Act in India. It is 100% holding company of ECEL and 99.62% holding company of EFIPL and ESCOTRAC and is engaged in the manufacture of agricultural tractors railway equipment and automotive shock absorbers. Facts of the Case On 16th February, 2012, the CCI received the notice under Sec. 6(2) of the Act in respect of the proposed amalgamation of ECEL, EFIPL and ESCOTRAC into EL falling under Sec.5(c)of the Act as per the scheme under the Companies Act, 1956. All the parties to the combination are the part of the ‘Escort’ group and the objective of this combination is group restructuring. Observations of CCI: Opining the said combination as the one not hindering the competition, since there is no change in control pre and post combination, the CCI approved the same.

Combination Registration No- C-2012/2/38- Order passed on 23rd February, 2012. CP Comments: No overlap of the activities of any two parties involved in the combination is observed. Absence of any horizontal integration implies no competition threat as such. Moreover it is the conglomeration within the group and no addition of market share is resulted thereby. 14. Merger of Anusha Investments Limited

(AIL) into Sundaram Clayton Limited (SCL):

Parties to Combination Amalgamating companies Anusha Investments Limited (AIL): Anusha Investments Limited (AIL), a wholly owned subsidiary of SCL is registered with RBI as non-deposit accepting NBFC. It is an investment company to hold the investments of the group companies. It is engaged in the business of investing in the shares, bonds, stocks, securities, debenture stocks in India and outside and has investments in automotive and non-automotive related businesses. AIL holds 48.56% of share capital in TVS Motor Company Ltd in which SCL holds 8.84%. Amalgamated Company: Sundaram Clayton Limited (SCL): It is a listed company incorporated under the companies Act and is a subsidiary of TV Sundaram Iyengar and Sons Ltd and AIL, SIL and TVS Investments Ltd are its wholly owned subsidiaries. It deals in automotive and non-automotive businesses. Its automotive business includes manufacture and sale of non-ferrous aluminium castings for automobiles as its own business and

     

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manufacture and sale of automotive and ancillary products carried on by through its direct and indirect subsidiaries. The non-automotive business of SCL includes trading in electronic hardware as part of its own operations and manufacture of electronic hardware, software services, finance, investment and asset management business carried on through its subsidiaries. Sundaram Investments Limited (SIL): It is an unlisted public limited company and is a wholly owned subsidiary of SCL and was incorporated for the purpose of carrying non-automotive businesses presently carried on by SCL and its subsidiaries and to carry on trading in computer software, hardware and investments as per the scheme on demerger of the non-automotive business of SCL into it. The shares of TVSIL which is a wholly owned subsidiary of SCL shall stand transferred to SIL as per the scheme. By transfer of shares of TVSIL to SIL, TVSIL becomes wholly owned subsidiary of SIL and the subsidiaries of TVSIL become the subsidiaries of SIL. Facts of the Case The proposed combination of Anusha Investments Limited (AIL), Sundaram Clayton Limited (SCL) and Sundaram Investments Limited (SIL) falling under Sec.5(c) and as per the scheme under Secs.391 to 394 of the Companies Act and in pursuance of the resolutions of their respective Boards was notified to the commission under Sec.6(2) of the Act, on 23rd January, 2012 jointly by all the parties to the combination. The scheme is a composite scheme of arrangement envisaging: 1. Split and restructuring of the business of SCL

into automotive and non-automotive 2. Amalgamation of AIL into SCL. 3. Demerger of non-automotive business of SCL

into SIL, after the amalgamation with exit options to the shareholders of SCL after

demerger and keeping SIL unlisted and consequential reduction of equity-share capital and reserves of SCL

The parties to the combination are direct and indirect subsidiaries of TV Sundaram Iyengar and Sons Ltd which is the flagship company of TVS group. As AIL holds 48.56% of share capital in TVS Motor Company Ltd in which SCL holds 8.84%, the amalgamation of AIL into SCL leads to SCL holding 56.4% of share capital of TVS Motors Company Ltd. Observations of CCI CCI has granted its permission for the proposed combination as no competition threat is perceived from the same as the transaction involves consolidation and division of the existing business within the same group and ultimate control over the business activities carried on by the parties to the combination before and after the proposed combination remains unchanged. Combination Registration No- C-2012/01/23- Order passed on 28th February, 2012. CP Comments Amalgamation of subsidiaries wholly owned by the enterprises within the same group with its holding company is not viewed skeptically from the competition angle, since there is no change in control and market share post combination and that is the reason why such amalgamations or mergers has been inserted by the Commission through amendment in the Combination Regulations on 23rd February 201 as clause 8A of Schedule I.

15. Merger of Viscount Management Services

(Alpha) Ltd (VMSA) into Reliance Capital Ltd (RCAP)

     

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Parties to Combination Amalgamating company Viscount Management Services (Alpha) Ltd (VMSA) It is a public limited company incorporated under the companies Act in which RCAP has 100% economic interests whereby RCAP controls the VMSA. 50% of its share capital is held by Viscount Management Services Ltd (VMS), 18% of its share capital is held by Reliance Land Pvt. Ltd (RLPL), 18% of its share capital is held by RCAP and its nominees and the remaining 14% is held by Reliance Share and Stock Brokers Pvt Ltd (RSSBPL) where all the above are part of RCAP group. VMSA is not carrying any activity except holding 47.89 % of the Equity share capital of Reliance Life Insurance Company Ltd (RLIC) and 13 % Equity shares in VMS. Amalgamated Company: Reliance Cap Ltd (RCAP) It is a public limited company incorporated under the companies Act and listed on BSE and NSE, registered as NBFC with RBI and is engaged in Asset financing, lending investment activities. It has through its investments has interests in asset management, mutual funds, pension funds, private equity and proprietary investments, stock broking and depository services, investment banking wealth management, home and commercial finance, financial products distribution, venture capital, exchanges, asset reconstruction and other activities in financial services. Facts of the Case The proposed merger Viscount Management Services (Alpha) Ltd (VMSA) into Reliance Cap Ltd

(RCAP) falling under Sec.5(c) was notified jointly by the parties thereto to the commission under Sec.6(2) of the Act, on 24th January, 2012 as per the scheme under Companies Act 1956. An application for the condonation of delay in filing the notice is accepted by the commission irrespective of the separate proceedings in relation thereto be initiated by the commission under Sec.43A of the Act. The scheme of amalgamation is subject to the VMSA becoming the Wholly owned subsidiary of the RCAP by means of acquiring all the shares of VMSA held by the other holders as depicted above. The objective of the merger as per the notice is to avoid the inefficiencies of multi-layered shareholding and to reduce cost improve managerial efficiencies and to facilitate the transfer of 26% stake in RLIC to Nippon Life Insurance Corporation of Japan. Observations of CCI The commission has approved the merger as it is not likely to cause any appreciable adverse effect on competition since there is no change iin control pre and post combination. Combination Registration No- C-2012/01/24- Order passed on 28th February, 2012. CP Comments VMSA is Asset holding company of RCAP and is 100% economically controlled by the RCAP even prior to this merger. RCAP is 18% share holder of VMSA (now becomes 100% holder of VMSA as the merger is subject to this condition) and VMSA is holding 47.89 % of the Equity share capital of RLIC. This merger facilitates RCAP which becomes 100% shareholder and thereby becomes 47.89% holder of RLIC, to transfer 26% to Nippon LIC of Japan which is mentioned to be one of the objectives of the proposed merger.

     

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16. Merger of DLF Construction Limited (DCL)

and DLF Hotels and Apartments Pvt. Ltd. (DHAPL) into DLF Projects Limited (DPL):

Parties to Combination Amalgamating Companies DLF constructions Limited (DCL) It is an unlisted public limited company incorporated under the companies Act and is a wholly owned subsidiary of DLF Ltd. engaged in the construction and project development for DLF group companies. DLF Hotels and Apartments Pvt. Ltd. (DHAPL) It is a private limited company incorporated under the companies Act and is a wholly owned subsidiary of DLF Ltd indirectly (50% of its share capital is held by DLF Ltd directly and 50% of its share capital is held by DLF Hotels Holdings Ltd, a wholly owned subsidiary of DLF Ltd) and engaged in the business of undertaking interior fit-outs and furnishings in the apartments constructed by the DLF group companies. Amalgamated Company: DLF Projects Limited (DPL): It is an unlisted public limited company incorporated under the companies Act and is a wholly owned subsidiary of DLF Home Developers Ltd which is a wholly owned subsidiary of DLF Ltd. This means DPL is indirectly wholly owned subsidiary of DLF Ltd. Facts of the Case The proposed merger DLF constructions Limited (DCL) and DLF Hotels and apartments Pvt. Ltd.(DHAPL) into DLF Projects Limited (DPL) falling under Sec.5(c) was notified to the commission under Sec.6(2) of the Act, on 10th February, 2012

Observations of CCI The commission has approved the merger as it is only a conglomeration of the wholly owned subsidiaries of a group which will not raise any competition concerns. Combination Registration No- C-2012/02/35- Order passed on 28th February, 2012. CP Comments The proposed combination will not be having any effect on the competition since the combination is within the group entities and there is no change in control or market share post combination. These kind of intra mergers have been made exempt by the Commission through Combination Amendment Regulations 2012

17. Merger of Orchid Research Laboratories

Limited (ORLL) into Orchid Chemicals and Pharmaceuticals Limited (OCPL)

Parties to Combination Amalgamating company Orchid Research Laboratories Limited (ORLL): It is a wholly owned subsidiary of OPCL incorporated under the companies Act and engaged in proprietary, novel drug discovery, research in therapeutic areas namely anti-infectives , anti-inflammatory, metabolic disorders and oncology Amalgamated Company: Orchid Chemicals and pharmaceuticals Limited (OCPL): It is a listed company incorporated under the companies Act and is a 100% Export Oriented Unit engaged in the business of manufacture or

     

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production of active pharmaceutical ingredients and formulations which include branded and regulated generics. Facts of the Case The proposed merger of Orchid Research Laboratories Limited (ORLL) into Orchid Chemicals and pharmaceuticals Limited (OCPL) falling under Sec.5(c) was notified to the commission under Sec.6(2) of the Act, on 3rd February, 2012 Observations of CCI The commission has no compunction in approving the merger for the following assigned reasons: 1. There is no overlap of businesses between the

parties. 2. There is no change in the control as a result of

the merger.

Combination Registration No- C-2012/02/31- Order passed on 29th February, 2012. CP Comments It is a merger of wholly owned subsidiary into its parent company where there is no increase in the market share or countervailing power of the amalgamated company to bar the entry of the new companies or driving of the existing ones out of the market. Moreover the merger is an integration of the company engaged in the research and development of the field in which the parent company’s business is involved and also in export promotion as the amalgamated company is a 100% EOU. Thus it is laudable transaction under Sec. 19(3) of the Act and not the violative of the same. The transaction has been made exempt from filing of notice under Sec 6(2) vide Ambination Amendment Regulation 2012 dated 23rd February 2012.

MARKET UPDATES

National News Highlights 04.02.12. Bharat Matrimony moves CCI against Google citing discriminatory trade practices related to AdWords Matchmaking portal BharatMatrimony.com has filed a complaint against Google in the Competition Commission of India, citing discriminatory trade practices related to its AdWords program. http://economictimes.indiatimes.com/tech/internet/bharatmatrimony-moves-to-cci-against-google/articleshow/11738802.cms 06.02.2012 Players approach watchdog against ‘domineering’ sports bodies The Competition overseer the Competition commission of India has initiated separate investigations against Hockey India and All India Chess Federation (AICF) via its DG in two separate but similar cases for the alleged abuse of dominance by the said authorities by way of deterring the players registered with them respectively from participating in the tournaments organized by other associations by threatening them with dire consequences if they do so and thereby depriving the players of their right to avail the best opportunities occuring to them. http://www.indianexpress.com/news/players-approach-watchdog-against-domineering-sports-bodies/ 07.02.2012. SC judgement on 2G licence will not impact investment : Moily The National Competition Policy is expected to receive the Cabinet’s sanction by March 2012,

     

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“The competition policy is going to be the second big financial reform in the country, after the reforms of 1991 and this is an excellent measure to combat inflation and this will be approved by the Cabinet by March 2012,” said Veerappa Moily, Union corporate affairs minister. http://www.business-standard.com/india/news/sc-judgement2g-licence-will-not-impact-investmentmoily/463904/ 11.02.2012 CCI order absolving sugar mill owners of cartelization charges comes as a big relief to the industry The recent order of the CCI exonerating the sugar industry from the allegation of cartelization is a big respite to the sector indeed and that the commission in giving the clean chit has observed the possibility of cartelization in a sector like sugar which is highly regulated by the government regulations controlling its prices and supplies is very remote. http://economictimes.indiatimes.com/markets/commodities/cci-order-absolving-sugar-mill-owners-of-cartelization-charges-comes-as-a-big-relief-to-the-industry/articleshow/11844388.cms 10.02.12 New National Competition Policy on the anvil Minister for Corporate Affairs, Veerappa Moily quoted that the National competition policy is expected to be ready by March 2012 and the aim of the new policy is to unleash “a second wave of reforms, after the economic reforms 1991. Advocating the policy the minister said that it can trigger "4-5 percent more GDP growth" in India and attack inflationary trends apart creating more jobs.

http://zeenews.india.com/business/economy/national-competition-policy-in-place-next-month-moily_38759.html 08.02.2012 CCI cracks down on pharma companies for unfair trade practices The CCI has got enraged on the Indian drug manufacturers for encouraging unfair trade practises by colluding with wholesale drug lobbies and asked them to furnish the documents and information http://economictimes.indiatimes.com/news/news-by-industry/healthcare/biotech/pharmaceuticals/cci-cracks-down-on-pharma-comp 12.02.2012 CCI scrutiny of foreign takeovers may not be effective: Ministry of corporate affairs is exploring possibilities of amending the Competition Act to so as to bring the entire Pharma sector FDI under the CCI scanner irrespective of the threshold limits http://www.business-standard.com/india/news/cci-scrutinyforeign-takeovers-may-not-be-effective/464440/ 12.02.2012 CCI understood to have found anti-trust law violations by BCCI After a protracted investigation of 8 months initiated on the reference made to the CCI by the Ministry of Sports and Youth Affairs, last year, the Director General of investigation of the Competition Commission has found that the BCCI, the governing body of cricket in India, is guilty of using its dominant position in the national cricket field to influence the bidding procedure in the IPL, by way of

     

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allowing "single bidding" of media and television rights for IPL matches to Mauritius based World sports Group and Singapore-based MSM, the two media groups , in contravention of Sec. 4(2)(e) of the Competition Act http://www.cricketcountry.com/cricket-articles/Anti-trust-law-violations-by-BCCI-found-by-CCI/11334 04/01/2 13 .02.2012. 'More stringent laws against cartelization needed' The Competition promoter and regulator, CCI is in favour of rigorous laws to prevent cartelization which is against consumer interests. "Cartelization can become a criminal offence in India in future," CCI member Ratneshwar Prasad said at a seminar on competition compliance at the Bengal National Chamber of Commerce and Industries (BNCCI) in Kolkata. http://twocircles.net/2012feb13/more_stringent_laws_against_cartelisation_needed.html#.Tzoro1akRug.gmail 19.02.2012. CCI scrutinizing cases against property developers On the basis of information filed by several stakeholders in the real estate, the competition commission is investigating into the allegations of abuse of dominance by real estate developers both small and big across the country which are almost on the same grounds as DLF case said the CCI Director General A K Chauhan talking to the reporters on the sidelines of RICS Real Estate Conference 2012.

http://www.indianrealtynews.com/real-estate-india/cci-scrutinising-cases-against-property-developers.html 20.02.2012 CCI approves merger of Netizen Rajasthan with Reliance Infratel The combination regulator, CCI has acceded approval to the planned merger of Netizen Rajasthan with the parent, Reliance Infratel (RITL) as the one with no antipathy towards competition but an innocent conglomeration of the subsidiary with its parent aimed at achieving cost reduction and increased operational efficiency. http://www.indianexpress.com/news/cci-approves-merger-of-netizen-rajasthan-wit/914461/ 22.02.2012 Probe in cement cartelization is still on. Talking about the cartelization of cement players, the Corporate Affairs Minister, Veerappa Moily said that it is too early to infer the cartelization of cement sector in the absence of any corroborative evidence there on and there are several factors to be delved into before coming to the conclusion on this issue. http://www.moneycontrol.com/news/business/cant-concludecement-cartelisation-probe-is-on-moily_672104.html 23.02.2012 CCI approves Sasan Power Infra merger with Reliance Power The Competition regulator, the Competition Commission of India has by its order dated 15.02.2012 has acceded the intended merger of Sasan Power Infrastructure (SPIL) a wholly owned subsidiary with its parent firm Reliance Power (RPL), which is promoted by Anil

     

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Ambani, as the one not precarious for the competition in India. http://economictimes.indiatimes.com/news/news-by-industry/energy/power/cci-approves-sasan-power-infra-merger-with-reliance-power/articleshow/12001178.cms. 4.02.2012 CCI approves Tata Power acquiring stakes in Tata BP solar JV The competition overseer, the competition commission of India has approved the proposed acquisition of remaining 51% stake in Tata BP Solar by the Tata Power from the JV partner BP Alternative Energy which results in Tata Power owning 100% of Tata BP Solar, as the one not likely to impede competition in the relevant market. http://economictimes.indiatimes.com/news/news-by-industry/energy/power/cci-approves-tata-power-acquiring-stakes-in-tata-bp-solar-jv/articleshow/12019801.cms 24.02.2012. IAAI files appeal to the Competition Commission An appeal filed by IATA (International Air Transport Association) Agents Association of India has been accepted by Competition Commission of India on February 23 February on the issue of CCI imposing a penalty on three associations of Rs 1 Lakh each in the case between Uniglobe Mod Travels vs IAAI, TAAI and TAFI. http://www.traveltechie.com/index.php/news/IAAI-files-appeal-with-Competition-Commission-of-India/3859 24.02.2012. CCI imposes penalty of Rs 165 crore on 48 LPG cylinder makers

Competition watchdog CCI on Friday imposed a penalty of Rs 165.58 crore on 48 LPG cylinder makers for forming a cartel while bidding during the tenders floated by Indian Oil in 2010-11. The penalty was imposed at the rate of 7% of the average turnover of the Companies. http://timesofindia.indiatimes.com/business/india-business/CCI-imposes-penalty-of-Rs-165-crore-on-48-LPG-cylinder-makers/articleshow/12022775.cms http://www.im4change.org/rural-news-update/cci-imposes-rs-165-cr-penalty-on-48-lpg-cylinder-makers-13389.html 25.02.2012. CCI tweak to M&A rules amicable to cos, but filing fee hiked The Competition commission has notified on February 23, 2012, the amendments in the Combination making prominent changes considering the filing of no. of applications not having any effect on competition and to bring the provisions to align with the New Takeover Code. in the existing ones so as to bring them in line with the new takeover code. Also the amendment has substantially increased the existing filing fees of Rs. 50,000/- and Rs.1,000,000/- respectively for filing Forms I and II to Rs.1,000,000/- and Rs.4,000,000/- respectively. http://www.moneycontrol.com/news/cnbc-tv18-comments/cci-tweak-to-ma-rules-amicabe-to-cosfiling-fee-hiked_673082.html http://business-standard.com/india/news/no-regulatory-vettingmas-involvingto-25-control/465821/ 25.02.2012. IDMA terminates all MoU's with AIOCD, advises members to follow provisions of Competition Act

     

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The Indian Drug Manufacturers' Association (IDMA) passed a resolution terminating all memorandum of understandings (MoU's) with AIOCD with effect from November 25. The executive committee of the association passed this resolution in the wake of the notices sent to them by Competition Commission of India (CCI) about an investigation they were carrying out against ‘alleged anti competitive practices' carried out by AIOCD. http://pharmabiz.com/NewsDetails.aspx?aid=67709&sid=1 27.02.2012. FIPB accepts pharma FDI riders The Foreign Investment Promotion Board (FIPB) has accepted some of the stiff riders proposed by the health ministry for multinational pharmaceutical companies trying to acquire Indian firms. However, it has rejected the ministry’s proposal to insist such companies must bring new technology and invest the necessary funds in research and development so that new molecules were developed keeping Indian conditions in mind. It has also rejected a proposed mechanism to monitor compliance of these conditions. http://business-standard.com/india/news/fipb-accepts-pharma-fdi-riders/465809/ 27.02.2012. Railways is ‘enterprise’, falls under CCI’s ambit: Delhi HC Dismissing the petition of the Railway Ministry, the Delhi High Court has ruled that the Goods transport sector of railways is an activity having a commercial angle and is not an inalienable function of the state and therefore is an “enterprise” within the meaning of Sec.2(h) of the Competition Act and the commission is empowered to hear complaints

against it for alleged abuse of its dominant position in that sector http://www.dayandnightnews.com/2012/02/railways-is-enterprise-falls-under-ccis-ambit-delhi-hc/ http://zeenews.india.com/news/nation/indian-railways-fall-under-cci-s-ambit-hc_760659.html http://www.transreporter.com/detail.php?pId=&Id=11&nId=7849 27.02.2012. CCI slaps penalty on 12 regional film bodies for anti-competitive decisions The Competition Commission of India (CCI) after clubbing all similar cases filed by different producers including Reliance Entertainment, UTV Software Communications Ltd and Eros against 12 film associations including associations of Karnataka, Andhra Pradesh, Tamil Nadu, Bihar, Madhya Pradesh, Rajasthan and Orissa, among others, has ordered to pay 10% of their three years annual income to the different petitioners, amounting to over 46 Lakhs in aggregate after finding them guilty of anti-competitive decisions. http://economictimes.indiatimes.com/news/news-by-industry/media/entertainment-/entertainment/cci-slaps-penalty-on-12-regional-film-bodies-for-anti-competitive-decisions/articleshow/12049285.cms http://articles.economictimes.indiatimes.com/2012-02-26/news/31101594_1_anti-competitive-agreements-and-abuse-films-associations 27.02.2012. Amarchand Delhi bags Vedanta $14bn Sterlite-Sesa Goa restructuring, as CCI relaxed merger control Amarchand Mangaldas Delhi team has succeeded in securing the CCI nod for the merger of Vedanta’s Sterlite Industries unit

     

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with Sesa Goa which would be reducing the debt of Vedanta by 61 per cent to $3.8bn Vedanta had acquired a 51 per cent stake in Sesa Goa from Mitsui in April 2007 for Rs 4,070 crore, which is the largest M & A deal in India's mining industry to date. http://www.legallyindia.com/201202272603/Corporate-/-MA/amarchand-delhi-bags-vedanta-14bn-sterlite-sesa-goa-restructuring-as-cci-relaxed-merger-control http://in.news.yahoo.com/vedanta-merge-sterlite-sesa-goa-14-bln-deal-051813747.html 27.02.2012. Voluntary disclosure of market share for M&A approval saves time In addition to the asset and turnover criteria provided for assessing the combinations requiring pre-merger approval of CCI under sec.6 of the Competition Act, the commission will also invariably take into consideration, the market share of the parties to the combination for the said purpose. Therefore if the parties to the combination are engaged in similar or identical or substitutable goods or provision of services and the post-combination market share would be more than 15 per cent in the relevant market or the parties to the combination are engaged at different stages or levels of the production chain in different markets, and their post-combination market share would be atleast 25 five per cent of the relevant market., the parties should voluntarily file the notice of the proposal with the commission as a time-saving measure disclosing the market share also though not explicitly required under the law to be provided simultaneously as it is the important parameter on the basis of which the approval is granted and the commission would invariably seek it in the course of its enquiry

28.02.2012. Railways appeals single judge's order on competition panel The Indian Railways has moved the Delhi High Court, against the order of a single judge, Justice Vipin Sanghi on Feb 23 holding that the Indian Railways is an “enterprise” within the meaning of the Competition Act and the commission has the jurisdiction to hear the cases of abuse of dominance against it. http://twocircles.net/2012feb28/railways_appeals_single_judges_order_competition_panel.html 28.02.2012. Section 10(46) of the Income-tax Act, 1961 – Exemptions- Notified body or authority - Competition Commission of India In exercise of the powers conferred by clause (46) of section 10 of the Income-tax Act, 1961 the Central Government vide notification no. 12/2012 [F.NO.142/15/2011-SO (TPL)]/S.O. 344(E), DATED 28-2-2012 has notified the Competition Commission of India, a Commission established under sub-section (1) of section 7 of the Competition Act, 2002 (Act 12 of 2003) for the purposes of the said clause i.e to exempt the specified income of the commission from the income tax. http://www.taxmann.com/breakingnews.aspx?sid=9389&t=1&c=1 29.02.2012. Competition panel's film release order challenged The film distributors and producers associations in various states against whom the CCI has passed an order imposing the penalty of more than 46 lakhs in aggregate for anti-competitive practices apart from asking them to cease and desist from such anti-

     

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competitive practices have decided to challenge the order to lift restrictions on the release of films to save the regional films. http://timesofindia.indiatimes.com/city/mumbai/Competition-panels-film-release-order-challenged/articleshow/12078662.cms 29.02.2012. Eximcorp drags Google to court The Competition Appellate Tribunal (COMPAT) has allowed the plea of Eximcorp India Limited alleging abuse of dominance by the Google India Ltd ( respondent) and issued a show cause notice to the latter with three weeks time to make its submissions thereon. http://www.indianexpress.com/news/eximcorp-drags-google-to-court/918234/ Global News Highlights* Australia 21.02.2012 ACCC targets supermarkets and petrol industries SUPERMARKETS and the petrol industry are in the cross-hairs of new competition watchdog chairman Rod Sims, who also flagged a criminal cartel case to "get the message across" to unschooled businessmen that cartel activity is illegal. http://www.theaustralian.com.au/business/economics/accc-targets-supermarkets-and-petrol-industries/story-e6frg926-1226276378426 21.02.2012 Dob in your supermarket, ACCC tells suppliers

Under the eye of the ACCC, supermarket giants Woolworths and Coles have been accused of abusing their market power. http://www.smh.com.au/business/dob-in-your-supermarket-accc-tells-suppliers-20120221-1tkaw.html 21.02.2012 ACCC Declares it will Champion Small Online Retailers Deliberating at the Australia-Israel Chamber of Commerce in Melbourne, the chairman of the Australian Competition and Consumer Commission, Rod Sims stated that online market is the top priority of the commissions for the coming year keeping in view its exponential growth owing to the huge technological development and eventually resulting in substantially increased number of complaints pertaining to the online market. http://www.powerretail.com.au/news/accc-champions-small-online-retailers/ 20.02.2012. ACCC to renew focus on vulnerable consumers Australian Competition and Consumer Commission Chairman Rod Sims has reiterated that the commission improved laws for unfair contract terms and consumer guarantees, new penalties for breaches and new investigation powers. http://www.businessspectator.com.au/bs.nsf/Article/ACCC-to-renew-focus-on-vulnerable-consumers-pd20120220-RN53K?opendocument&src=rss 20.02.12. Know your rights on your internet connection - and always read the fine print ACCC says anyone signing an internet connection contract is entering a legal

     

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agreement enforceable by law because under Australian Consumer Law, consumer guarantees are intended to ensure the consumer to get the service paid for. http://www.news.com.au/money/money-matters/cash-in-on-connection-complaints/story-e6frfmd9-1226275559140 Switzerland 17.02.2012. Swiss competition authorities approves Apax Orange buy The Swiss Competition Commission has approved U.K. private equity firm, Apax Partners' proposal for acquiring Orange Switzerland from France Telecom as it is not likely to result in dominant market position and is not the one endangering the competition and there is no threat to market dynamics and innovation as well. http://www.marketwatch.com/story/swiss-competition-authorities-ok-apax-orange-buy-2012-02-17?reflink=MW_news_stmp Europe 06.02.2012. EU competition law thwarts Vodafone’s Greek merger deal VODAFONE will scrap a $1bn merger of its Greek business with a local competitor, Wind Hellas aimed at building telco to rival the Greek state player Cosmote, in anticipation of its blockage by the EU regulatory authorities to block the same due to “regulatory uncertainty” on EU competition law and a deep recession in Greek economy. http://www.cityam.com/latest-news/eu-competition-law-thwarts-vodafone-s-greek-merger-deal

13.02.2012. Competition regulator 'determined' to prevent standards rights abuses EU's Competition Commissioner, Joaquin Almunia said that the companies should not abuse their patent rights to the technology by "occupying" markets, restricting new firms from emerging and stifling innovation. Owners of such standard essential patents are conferred a power on the market that they cannot be allowed to misuse. Standardization processes must be on fair, reasonable and non-discriminatory (FRAND) terms. http://www.out-law.com/en/articles/2012/february/competition-regulator-determined-to-prevent-standards-rights-abuses/ Pakistan 21.02.2012 Search and inspection: powers exercised with due diligence: CCP chief Speaking at the 13th quarterly meeting of Competition Consultative Group (CCG) held in Pakistan on 6th Feb 2012, Competition Commission of Pakistan (CCP) Chairperson Rahat Kaunain Hassan has said that the surprise element is very important in the search and seizure and business communities should not consider them as the adverse actions as these powers are being used by the commission with due care and diligence and without any intention to target specific business interests. She further stated that the commission has never used force even in case of forcible entry but convinced the concerned persons to give access to the record and the companies have started realizing that the search and inspections should not be considered as stigma or show cause notice, but a routine work of the Commission

     

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Detailing the achievements of and the actions taken by the commission against the companies involved in anti-competitive practices during 2010-2011 and the tempo of such actions the Chairman said that the Commission has become more confident in undertaking these inspections and identifying relevant information quickly, and quoted the recent search and inspection of CCP of All Pakistan Cement Manufacturers Association and the Kohat Cement office and others like Pakistan Ship Agents , Pakistan Vanaspati manufacturers etc. She said the Commission, in the formulation of a Roadmap (2010-13), has emphasized its focus on certain areas such as public procurement, concession agreements, expanding the Office of Fair Trade (OFT)'s role to curb deceptive marketing, restricting associations to their mandate, and improving the legal framework to promote the competition perspective keeping in view their relatively greater impact on the economy, wherein CCP has detected violations of competition law by certain undertakings The chairman informed that during FY 2010-2011, 67 cases of acquisition of shares, 14 cases of Mergers between the undertakings and 3 Joint Venture cases were reviewed by the Commission and NOC given to the applicant undertakings and that there were eight search and inspections during the period under review compared to four in the preceding three years (2007-10). Three cases were also subjected to a second-phase review. An online complaint cell has also been established within CCP to take consumer complaints, she added. Further in relation to competition advocacy the Commission has developed a Voluntary Competition Compliance Code to promote voluntary compliance of the law; published a booklet on 'Protection from Anti-Competitive Practices: A Guide for Consumers and Businesses'; organized an international conference in December 2011; held 13 meetings of Competition Consultative Group to

solicit feedback from key stakeholders; and issued policy notes to highlight and enhance competition to government and other regulatory bodies. CCP is not a price regulating body, Rahat remarked. http://www.brecorder.com/business-a-economy/single/672/189/1151311/ South Africa 13.02.2012 Competition Commission recommends Prohibition of Healthcare Merger The Competition Commission has recommended the Competition Tribunal to prohibit the proposed acquisition by Life Healthcare Group (Proprietary) Limited (LHG) of additional shares in Joint Medical Holdings Limited (JMH), which would increase its current 49% shareholding in JMH to a majority stake resulting in a shift from joint to sole control, reduction in the countervailing power of large medical schemes, substantial reduction in the countervailing power of the remaining shareholders of LHG, who are mostly doctors and ultimately is likely to substantially prevent or lessen competition in the supply of private healthcare services in the Durban area and consequently lead to increased costs of healthcare. The matter will be heard by the Tribunal in the coming weeks. http://www.mondaq.com/x/164544/Antitrust+Competition/Competition+Commission+Recommends+Prohibition+Of+Healthcare&email_access=on United Kingdom 22.02.2012. London UBS Turning Whistleblower in Libor Probe Pressures Rivals

     

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The UBS one of the parties to the bank cartelization, Libor scam derived from a survey of banks conducted daily for the British Bankers’ Association in London has turned first- confessor as regulators probe the alleged manipulation of interest rates pushing up the risks for other banks that set the benchmark for $360 trillion of securities worldwide. Based on UBS’s disclosures, regulators in Canada have alleged that banks communicated with each other and through brokers manipulated the Yen Libor rate. By making the first disclosure to regulators, the Zurich- based lender made it harder for competitors including JPMorgan Chase & Co. and Citigroup Inc. to claim similar protection. UBS’s competitors could face higher penalties for not coming forward earlier. By making the first move in this direction, UBS is trying to shorten the probe and lowering the fine against itself. Its disclosure to regulators that employees colluded to rig the London interbank offered rate is likely to renew calls for regulators to overhaul the way firms set the rate. UBS disclosed that it had got conditional immunity from the U.S. Department of Justice and from the Swiss Competition Commission in its probe of Libor. The investors have already filed suits against Banks alleging they manipulated Libor in violation of U.S. antitrust law. http://www.businessweek.com/news/2012-02-22/ubs-turning-whistleblower-in-libor-probe-pressures-rivals.html United States 19.02.2012. Federal investigators take look at Highmark's acquisition plans

Federal investigators are scrutinizing the proposed acquisition of West Penn Allegheny Health System by Highmark Inc. to determine if it violates antitrust laws. U.S. Department of Justice officials are seeking documents related to the acquisition as part of their investigation into potential violations of the Sherman and Clayton acts, antitrust laws that prohibit corporations from engaging in anti-competitive behaviors such as merging to create a monopoly and price fixing. http://www.pittsburghlive.com/x/pittsburghtrib/news/s_782403.html

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