INDIA Trends and Developments Contributed by: Vaibhav Choukse, Ela Bali, Nripi Jolly and Faiz Siddiqui, JSA
contended that the CCI does not have jurisdic - tion to review the combination, as – per the Elec - tricity Act, 2003 (the “Electricity Act”) – the said combination squarely falls within the exclusive jurisdiction of the Joint Electricity Regulatory Commission. While affirming its authority to adjudicate the matter, the CCI, inter alia, noted that – although the Electricity Act governs electricity-related matters – it does not oust the CCI’s jurisdiction to adjudicate a matter. Further, the aforesaid statutes are not conflicting, and the same can be reconciled through harmonious interpretation. Therefore, the combination ought to have been notified to the CCI. However, the CCI refrained from imposing any monetary penalty on TPL after taking into consideration several mitigat - ing factors. Goldman Sachs (India) Alternative Investment Management Private Limited (“GS”)/Biocon Biologics Limited (”Biocon”) In December 2020, GS consummated the sub - scription of optionally convertible debentures, equivalent to less than 5% shareholding of Bio - con along with certain reserved matter rights, information rights such as access to minutes of the board, committee, and shareholder meetings (the “minutes right”), and inspection rights such as access to premises and personnel of Biocon (the ”access right”). In February 2022, the CCI issued an SCN to GS, asking it to explain why the combination was consummated without its approval. GS inter alia contended that the combination could claim the benefit of “item 1” exemption under the erstwhile combination regulations, as it involved acquisi - tion of less than 10% shareholding of Biocon, made solely as an investment and in the ordi- nary course of business (OCB), with no director
or observer appointment right or involvement in Biocon’s affairs and management. The minutes right and the access right were minority investor protection rights, available to all investors. The CCI noted that it is the nature of rights and not their availability to all investors that deter- mines whether they are ordinary or special. Fur - ther, the minutes right granted access to Bio - con’s CSI, which was not available to ordinary shareholders, making it a special right. This sug - gests that GS’ investment was not made in OCB and hence, item 1 exemption cannot be claimed. Accordingly, the CCI imposed a penalty of INR40 lakhs (approximately USD46,567 million) on GS. Matrix Pharma Private Limited/Tianish Laboratories Private Limited In February 2024, the CCI approved the acqui - sition of Tianish Laboratories Private Limited (“target”) by Matrix Pharma Private Limited (”Matrix”), and subscription of OCDs of Matrix by Kotak Strategic Situations India Fund II, and Kotak Alternate Asset Managers Limited (referred to as the “proposed acquisition”). Between March and April 2024, the transaction structure underwent several changes to secure alternate funding, which led to a change in the ownership structure of Matrix – although its ulti - mate controlling person remained the same. The aforesaid changes led to another merger notifi - cation being filed on 23 April 2024. The CCI found that certain funding steps were completed before notifying the CCI. Considering that the parties did not intend to hide facts, dis - closed funding transparently and co-operated fully, a nominal penalty of INR5 lakhs (approxi - mately USD5,800) was imposed on the parties.
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