MCA's regional directors may be given power to clear M&As
The Ministry of Corporate Affairs (MCA) is considering enhancing the powers of its regional directors to examine proposals for mergers and acquisitions (M&As) in order to reduce the burden on the National Company Law Tribunal (NCLT) and speed up M&A approvals.
The M&A process at present takes a minimum of 6-8 months as an approval from the NCLT under the Companies Act is mandatory, along with the other regulatory clearances.
A report submitted by the Competition Law Review Committee to the government last month recommended a 'green channel' for faster regulatory approvals for mergers and acquisitions that may have no major implications on competition.
Delay from the NCLT in final resolution of Insolvency and Bankruptcy Code (IBC) cases has also been a nagging point, though the MCA insists the Tribunal has been very expeditious in disposing these. Over 12,000 cases have been filed since the implementation of the insolvency law and setting of the NCLT.
The MCA plans to fine-tune a proposal for this in a bill, which is under preparation. If the MCA is able to implement what is intends to, it would let the NCLT take up only Companies Act and the Insolvency and Bankruptcy Code (IBC) related cases.
"Currently, regional directors are only authorised to approve M&As for small companies and those between a parent and a subsidiary company under Section 233 of the Companies Act. The Ministry is considering to enhance the powers of regional directors to consider mergers and acquisitions (M&As) proposals to reduce the burden on the National Company Law Tribunals (NCLTs)," officials said.
Offical sources said this will reduce the burden of the NCLT, fast-track M&A process and result in speedy disposal of IBC cases. IANS