Category: Competition Law

*NCLAT New Delhi Bench has upheld the order dated 17 Dec 2021 passed by the CCI whereby Amazon was directed to pay Rs. 200 Crores penalty U/s 43A of the Competition Act, 2002.*

*The NCLAT has directed Amazon to deposit the penalty within 45 days and comply with the CCI order. Vide order passed on 13.06.2022.*


*Amazon.com NV Investment Holdings LLC v Competition Commission of India & ors dated 17/12/2021*

https://acrobat.adobe.com/link/review?uri=urn:aaid:scds:US:8f9d3587-886d-38aa-bdcf-f4333380f100

The Competition Commission of India (CCI) issued a final order today against seven (07) companies/ firms which were found to have contravened the provisions of Sections 3(3)(a), 3(3)(b), 3(3)(c) and 3(3)(d) read with Section 3(1) of the Competition Act, 2002 (Act), which proscribe anti-competitive agreements.

The case was initiated on the basis of a lesser penalty application filed by one of the cartelising entities. Under Section 46 of the Act, a cartel member may approach the Commission by way of filing an application seeking lesser penalty, in return for providing full, true and vital disclosures in respect of the alleged cartel to the Commission.

CCI found these seven (07) companies/ firms to have indulged in cartelisation in the supply of Protective Tubes to the Indian Railways by means of directly or indirectly determining prices, allocating tenders, controlling supply and market, co-ordinating bid prices and manipulating the bidding process. The evidence in the matter included regular e-mail communications between the parties and filing of bids from same IP addresses by certain parties etc.

Further, ten (10) individuals of these seven (07) entities were also held by the CCI to be liable for the anti-competitive conduct of their respective companies/ firms, in terms of the provisions of Section 48 of the Act.

CCI imposed penalties @5% of the average turnover/ income upon the companies/ firms and their certain individuals found guilty of violating the provisions of the Act. However, benefit of reduction in penalty under the provisions of Section 46 of the Act of 100% was given to the lesser penalty applicant. Post reduction, CCI directed the parties to pay penalties totaling to approx. INR 30 lacs, besides issuing a cease-and-desist order.

The order was passed in Suo Motu Case No. 06 of 2020 and a copy of the order is available at CCI website at http://www.cci.gov.in.

The Competition Commission of India (CCI) approves acquisition of shareholding in Hitachi Construction Machinery Co., Ltd. by HCJI Holdings G.K., Citrus Investments, HCJ Holdings 2 G.K., Japan Industrial V – GP K.K., and other investors.

Citrus Investments LLC (“Citrus”), a wholly owned subsidiary of ITOCHU Corporation (“Itochu”), HCJ Holdings 2 G.K. (“HCJ Holdings/HCJ HD2”), Japan Industrial – GP, Manalsu, Primrose GP, Shepherds Hill Partners III Ltd., and Sonora Partners III Ltd. through HCJI Holdings G.K. (“HCJI”), proposes to acquire 26% in the Hitachi Construction Machinery Co., Ltd. (“HCM/Target”) from Hitachi Ltd., on a fully diluted basis.

HCJI is currently a wholly owned subsidiary of Japan Industrial Partners Inc. HCJI was established as a limited liability company to hold shares in the Target and undertake all business incidental to the same. Prior to the Proposed Transaction, HCJI will be jointly held on 50:50 basis by (a) Citrus; and (b) HCJ HD2, and will change its corporate form to a stock company.

The ITOCHU Group operates in a comprehensive array of business domains, from upstream areas, such as transactions involving raw material, to downstream domains, such as retail. Itochu does not have any subsidiaries/ investee companies active in India.

HCM is listed on the Tokyo Stock Exchange. Its major shareholder and controlling parent company is Hitachi (holding 51.5 % of the shares in HCM). HCM is engaged in the manufacturing of mining and construction machinery and solution business (such as development, production, distribution of parts and service solutions as part of the after-sales services for mining facilities and equipment) globally. HCM also operates in India through the following subsidiaries and affiliates: (i) Tata Hitachi Construction Machinery Company Pvt Ltd; (ii) H-E Parts International LLC; and (iii) Bradken India Private Limited.

Detailed order of the CCI will follow.

The Competition Commission of India (CCI) approves acquisition of minority stake of BDR Pharmaceuticals International Private Limited (BDR/Target) by Multiples Private Equity Fund III, SRF Transnational Holdings Limited (SRF Transnational), Balkrishna Industries Limited (BIL), Dharmayug Investments Limited (DIL), QRG Investments and Holdings Limited (QRG), Mr. Nishant K. Agarwal and Ms. Mallika Srinivasan (Acquirers).

SRF Transnational, BIL, DIL, QRG, Mr. Agarwal, and Ms. Srinivasan are collectively referred to as the ‘Financial Investors’. The Multiples Fund III, Financial Investors and the Target are collectively referred to as the ‘Parties’.

The proposed combination relates to acquisition of minority stake by Multiples Fund III and Financial Investors in the Target. The acquisition of equity shares of the Target and falls under Section 5(a) of the Competition Act, 2002. A brief description of the Parties is provided below:

Multiples Fund III: Multiples Fund III is a Category II Alternative Investment Fund with the Securities and Exchange Board of India and is being managed by Multiples Alternate Asset Management Private Limited. It belongs to the Multiples group, which, through its portfolio companies, is directly or indirectly engaged in sectors including film exhibition, financial services, banking, etc. in India.

SRF Transnational: It is a non-banking financial company (NBFC) registered with the Reserve Bank of India (RBI). It is engaged in the business of investment in securities of other companies. 

BIL:  It is engaged in the business of manufacturing and selling of off-highway tyres.

DIL: It is an NBFC registered with the RBI.

QRG: It is an NBFC registered with the RBI and holds investments in several companies. 

Mr. Nishant K. Agarwal: He is an independent investor.

Ms. Mallika Srinivasan: She is an independent investor.

BDR: It is a pharmaceutical company specialised in four therapeutic segments i.e., oncology, critical care, gynecology, and neurology. It is engaged in business of: (i) manufacture and sale of active pharmaceutical ingredients; (ii) manufacture and sale of formulations; and (iii) contract development and manufacturing services.

Detailed order of the CCI will follow.

The Competition Commission of India (CCI) has notified the revised format of Form II (i.e. long form of merger notification) vide Notification no. CCI/CD/Amend/Comb. Regl./2022 dated 31st March 2022. This amendment revises the content and format of information that the parties to a combination uses to file under section 6(2), where the post-combination market share exceeds 15% in cases of horizontal overlap and 25% in cases of vertical interface. Generally, these are the cases requiring detailed examination to assess the likely effect of the combination on competition in India.

The revised Form II will be effective from 1st May 2022. The one-month period has been given for making the revised form effective. Time period of one month will provide sufficient time for the notifying parties to get familiarised with the revised Form – II.

The amendment to the Form – II is a part of series of measures undertaken by the CCI towards ease of doing business, reducing the compliance burden on the parties and making the assessment of the combination more objective and focussed. Previously, the CCI had also amended the Form – I (i.e. short form of merger notification) in August 2019. This form is used by parties to provide information while seeking approval of the Commission for a combination, where the combined market share post-merger is not significant. Amendment to Form – I was followed by detailed guidance notes to Form – I issued in March 2020 that provided clarifications on the nature and scope of information to be filed and elaborated criterion for availing green channel by the parties.

The amendment to the Form – II is aimed to remove duplicity and limit the information requirement so that they remain focused and relevant to the objective of assessment of a merger, suitably clustering the information on common subject, streamlining the flow of information for better navigation and appreciation of material furnished in the notification. Further, the template of revised long form is based on the structure of short form so as to have modular formats of merger notification that would reduce the time and efforts required to move from the short form to the long form. Further, revision in the long form has been undertaken without sacrificing the cause of merger regulation. Revised long form is intended to strike a balance between facilitation and enforcement functions and create a culture of compliance.

The CCI also intends to issue guidance notes for revised Form II in due course. This guidance notes will elaborate upon the queries in revised Form II and include certain queries from existing Form II that are explanatory in nature.

The amendments to Combination Regulations are available at www.cci.gov.in.

The Competition Commission of India (CCI) approves acquisition of certain compulsorily convertible preference shares of Hero FinCorp Limited (Target) by AHVF II Holdings Singapore II Pte. Ltd. (Acquirer) under Section 31(1) of the Competition Act, 2002.

The Proposed Combination relates to the subscription of certain compulsorily convertible preference shares by Acquirer of Target, which upon conversion will represent a certain shareholding in HFL.

Acquirer is a private limited company incorporated in Singapore. It is owned by investment funds managed by affiliates of Apollo Management, L.P. Apollo Management, L.P., its affiliates, and investment funds managed by its affiliates are together hereinafter referred to as Apollo.  Apollo Management L.P. is a limited partnership formed in accordance with the laws of the State of Delaware, U.S.A. Investment funds managed by affiliates of Apollo invest in companies and debt issued by companies involved in various businesses throughout the world.

Target is an entity incorporated in India and is primarily engaged in the business of financing and related financial services. HFL is registered as a systemically important non-deposit taking non-banking finance company with the Reserve Bank of India. HFL’s sole wholly owned subsidiary, Hero Housing Finance Limited offers a range of housing loans and loans against property to various segments of society.

Detailed order of the CCI will follow.

The Competition Commission of India (CCI) approves acquisition of 100% share capital of L&T Investment Management Limited (L&T AMC/Target) by HSBC Asset Management (India) Private Limited (HSBC AMC/Acquirer)

The proposed combination relates to acquisition of 100% equity share capital of L&T AMC by HSBC AMC from L&T Finance Holdings Limited (L&T Sponsor/Seller) and its nominees. The acquisition of equity shares of the Target falls under Section 5(a) of the Competition Act, 2002.

HSBC AMC / Acquirer

HSBC AMC is the asset management entity for operating the day-to-day functioning of HSBC Mutual Fund schemes (HSBC MF). It is responsible for managing investments of money pooled-in through investments in HSBC MF. HSBC AMC is a wholly-owned indirect subsidiary of HSBC Holdings PLC (HSBC Group) and belongs to the HSBC Group of companies.

L&T AMC / Target

L&T AMC is the asset management entity for operating the day-to-day functioning of L&T Mutual Fund schemes (L&T MF). It is responsible for managing investment of money pooled-in through investments made in L&T MF. L&T AMC is a wholly owned subsidiary of L&T Sponsor.

Detailed order of the CCI will follow.