August 23, 2017 2:56:30 am
Asserting its dominant position, the Ministry of Corporate Affairs has proposed that the Competition Commission of India (CCI) members’ strength be pruned to half and has declined the fair trade watchdog’s request for delegating it the power to appoint its investigative wing.
Citing ‘de minimis’ or minimalist intervention approach, coupled with March 2017 relaxation to firms from seeking CCI approval in mergers and acquisitions, the MCA has recommended that the Commission be pruned to chairperson and three members from current strength of chairperson and six members.
Last March, MCA notified that March 2016 exemption for seeking CCI approval would apply to mergers and acquisitions. Earlier, it diluted the quasi-judicial body’s hold by exempting from approval combination deals where the target company had assets of Rs 350 crore or turnover of up to Rs 1,000 crore.
The MCA’s suggested mode for paring the Commission is not to fill up the vacancies which happen next year when two members retire. With one post already lying vacant after Madhusudan Sahoo shifted to Insolvency and Bankruptcy Board of India, the bench would be reduced to four, it added.
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While seeking amendment in the Competition Act, the MCA has said that the gains from the CCI vacancies could be used for filling up the National Financial Reporting Authority being set up to enforce discipline among the chartered accounts in the country.
In a separate move, the MCA recently turned down CCI’s November 2016 request seeking delegation of power to appoint and decide the employment terms of the Director General and other officers in its specialised investigative wing.
Backed by law ministry’s opinion, the ministry said that the “DG investigates the cases referred to it by the CCI but undertakes its task of investigation independently of the CCI. In order to maintain independence of the DG from the CCI, power to appoint the DG has been given to Central government”.
The MCA clung on to Section 16 of the Competition Act on appointment of the DG and said that it would not be advisable to confer the appointment powers to the CCI for “maintaining the independence of the investigation by the Director General”.
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