1 CCI: ICSI-NIRC Company secretaries and the Competition Act, 2002 17 th October 2015 Surendra U....
-
Upload
mitchell-jones -
Category
Documents
-
view
215 -
download
0
Transcript of 1 CCI: ICSI-NIRC Company secretaries and the Competition Act, 2002 17 th October 2015 Surendra U....
1
CCI: ICSI-NIRCCCI: ICSI-NIRC
Company secretaries and the Competition Act, 2002
17th October 2015
Surendra U. KanstiyaPractising Company [email protected]
2
COMPETITION BENEFITS ALLCOMPETITION BENEFITS ALL
Healthy competition culture promotes:Consumer welfare: Choice, price, qualityFair play: be a ‘price taker’ and not ‘price
maker’Innovation: ‘to be the best’
AND
Competition kills competition
3
4
ENTERPRISEENTERPRISE
PERSON OR GOVT. DEPTT. engaged in activity relating to production, supply, distribution, acquisition, control of goods; services, of any kind.
PERSON: individual; firm; HUF; co.; AoP; corporation; body corp.; coop. soc.; local authority; other artificial juridical persons.
EXCLUDED: Govt. Deptt. performing sovereign functions: atomic energy, currency, defence; space
5
APPEARANCEAPPEARANCE
Sec. 35 and Sec. 53S:
A person or enterprise or DG may either appear in person or authorise one or more chartered accountants or company secretaries or cost accountants or legal practitioners or any of his or its officers to present his or its case ……
6
COMPANY SECRETARY
Join CCI / COMPATExperts and Professionals : The CCI
(Procedure for Engagement of Experts and Professionals) Regulations, 2009
77
8
ANTI COMPETITIVE AGREEMENTS
‘All anti-competitive agreements are void’
99
1010
HORIZONTAL AGREEMENTS = HORIZONTAL AGREEMENTS = HARDCORE CARTELSHARDCORE CARTELS
PRESUMED TO BE ANTI-COMPETITIVE Price fixing Limiting production, supply etc. Market sharing Collusive bidding/rigging
Others: Subject to ‘Rule of reason’ test
* EXCLUDES JV agreements if increase efficiency
11
VERTICAL AGREEMENTS PROHIBITED VERTICAL AGREEMENTS PROHIBITED IFIF AFFECT COMPETITION AFFECT COMPETITION
Tie-in arrangementsExclusive supply agreementsExclusive distribution agreementsRefusal to deal/vertical boycottResale price maintenance
Rule of reason approach
12
COMPANY SECRETARIESCOMPANY SECRETARIES
Manner of exchange of information within the trade bodies; joint ventures; cross directorships
Communication with regard to pricing; markets; technical development in terms of productivity, investment and profitability
13
ABUSE OFDOMINANT POSITION
‘No enterprise or group shall abuse its dominant position’
14
DOMINANT POSITION DOMINANT POSITION
DOMINANCE:- Capacity to act independent of
competitive presence.- Affecting appreciably the relevant
market, competition and consumers.
15
1616
17
ABUSE OF DOMINANCE:PRACTICESABUSE OF DOMINANCE:PRACTICES
Unfair, discriminatory and predatory pricing Limiting production, markets or technical
development Denial of market accessSupplementary obligations unconnected to
main contract: full line forcingUsing dominant position to enter another
market
1818
JSPL v SAIL [Case No 11/2009JSPL v SAIL [Case No 11/2009December 20, 2011]December 20, 2011]
The DG has made reference to the minutes of the 270th meeting of Board of Directors of SAIL held on 28.05.2001 wherein the Board has acknowledged the need "to meet the threat of competition posed by setting up of a new Mill by M/s. Jindal Steel……
1919
SAIL: BOARD MINUTES SAIL: BOARD MINUTES
In the minutes, there was a mention of JSPL's aim of setting a rail manufacturing unit. It was also mentioned in the minutes that due to competition which is going to come due to the entry of JSPL in the market for rails, SAIL should upgrade the facilities of the rail and structural plant. The D.G. further held that the MoU dated 01.02.2003 effects competition and does not ensure freedom of trade.
20
COMPANY SECRETARIESCOMPANY SECRETARIES
Determination of dominance and Sec. 19(4): Tall claims in Prospectus, websites, advertisements. Schemes of amalgamation.
Pricing: Unfair; discriminatory; predatory - CCI (Determination of Cost of Production) Regulations, 2009
21
COMBINATIONS
‘Certain combinations are regulated’
The Competition Commission of India (Procedure in regard to the transaction of business relating to
combination) Regulations, 2011 (Amended in 2012, 2013, 2014, 2015)
22
2323
24
PRIOR
NOTIFICATION
(Filing of Form)
25
MANDATORYMANDATORY A notice must be given by enterprise to CCI
about combination within 30 days from execution of agreement / resolution
Phase I review process: CCI to form prima facie opinion in 30 days
Phase II review process: CCI to pass order within 210 (180 days), failing which combination to be deemed as approved.
FAILURE: Penalty, may extend to 1% of the total turnover or the assets, whichever is higher.
26
FORMSFORMS
Form I - Regulation 5(2) combinations Form II - Regulation 5(3) combinations Form III - For exempt acquisition by FII etc Form IV – Advertisement
27
FORMS FOR NOTIFICATIONSFORMS FOR NOTIFICATIONS
28
2929
30
VOID COMBINATION
a combination which causes or is likely to cause an
APPRECIABLE ADVERSE EFFECT ON COMPETITION
(AAEC)WITHIN RELAVANT MARKET
IN INDIA
31
32
CONSULTATION PRIOR TO FILINGCONSULTATION PRIOR TO FILING
- NON BINDING, INFORMAL- NON BINDING, INFORMAL The facility of informal and verbal
consultation with the staff of CCI prior to the filing of notice to a proposed combination is available at CCI.
The advice would be given as an additional assistance facility, and would not be deemed to be the opinion of the CCI in any manner whatsoever or binding on the CCI.
33
COMPANY SECRETARIESCOMPANY SECRETARIES
Assets/turnover determination Non-compete clause Market share analysis Group/control impact Failing business costing and impact Compliance report Filing of forms Divesture of assets: Independent agency – PCS firm
34
COMPANY SECRETARYCOMPANY SECRETARY
i. Act as Advisors, Consultants
ii. Audit of various agreements
iii. Compliance certificate
iv. Training programmes
v. to oversee modification
3535
PENALTY UNDER COMPETITION PENALTY UNDER COMPETITION ACT, 2002ACT, 2002
Penalty of Rs.12,474 crore has been imposed on 351 companies – Mr Arun Jaitly in Lok Sabha on 27th February 2015
Period: May 2009 to January 2015.
Average: Rs.35 Cr
36
COMPETITION COMPLIANCE PROGRAMME
‘Contraventions can be avoided’
37
THANK YOU ALL