Under scanner

New Delhi, June 8: The government plans to notify the rules on mergers and acquisitions that will allow the Competition Commission of India (CCI) to compulsorily scrutinise merger and acquisition bids such as the one that has been proposed between Reliance Communications and South Africa’s MTN as well as the proposal involving Idea Cellular and Spice Telecom.

Top officials in the ministry of corporate affairs said, “We are waiting for the CCI to put in place staff and train people. Very soon, the notifications allowing the CCI to scrutinise such deals would be in place and takeovers and buyouts would be checked for a potential monopoly impact.”

Under the law, the CCI can veto takeovers by multinationals as well as large mergers and acquisitions by Indian firms, if the watchdog felt that this can impact competition in the Indian market.

Sources said Prime Minister Manmohan Singh had indicated that he would like to see the CCI become functional at the earliest as there were apprehensions that firms might take an advantage of the current rise in commodity prices to raise their prices beyond what cost increases permit.

The CCI has the powers to investigate suspected cartels and order them to desist from price hikes or exercising other monopoly powers they may try to force on the market. However, till now, it lacks the manpower to launch the kind of probes that may be required in a complex economy like India’s.

Officials said, “There is the concept of whistle-blowers which we will also try to implement. Those working for the cartels can give us information, we will protect them adequately. That is the only way cartels can be broken.”

In recent months, the finance minister has indicated that the government suspected cartels might have been formed to hike metal prices. The CCI itself has initiated inquiries into steel and sugar pricing norms in the country. Officials said the CCI law, passed some time back, provided the commission to seek a prior notification for any takeover in the country by a multinational, if the entity has a turnover of more than $1.5 billion and an asset base of $500 million.