NCLAT gives relief to NTPC on CCI fine
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New Delhi (Uttam Hindu News): The National Company Law Appellate Tribunal (NCLAT) has stayed CCI’s order imposing a fine of Rs 40 lakh on state-owned power utility NTPC for not disclosing its acquisition of 35.47 per cent stake in Ratnagiri Gas and Power Pvt Ltd. According to the NCLAT order, the penalty has been stayed as NTPC has “deposited term deposit advice of Rs 10 lakh drawn on State Bank of India, which is 25 per cent of the total penalty amount”. The case is now likely to be heard on February 27, 2024.
NTPC had challenged the CCI order in the NCLAT, which is an appellate authority on decisions of the Competition Commission of India (CCI). NCLAT, in its order issued this week, has directed CCI to file its reply on NTPC’s appeal within four weeks. After this, NTPC has also been allowed to file a reply within four weeks.
NTPC had acquired equity shares of RGPPL from its lenders in 2020. As a result of this acquisition, its share capital in RGPPL increased from 25.98 per cent to majority stake of 60.98 per cent. CCI sent a show cause notice to NTPC because as per the Competition Act, enterprises are required to obtain its permission before acquiring controlling stake in another enterprise engaged in the same business.
However, NTPC had said that the acquisition of additional 35.47 per cent stake in RGPPL was a part of the resolution plan to settle the outstanding debt of RGPPL. Moreover, the ultimate goal of that transaction was not to acquire equity shares or control, but to settle the debt of RGPPL. NTPC also argued that it has not acquired any additional rights and even after completion of the transaction it has joint control in RGPPL with GAIL and Maharashtra State Power Distribution Company Limited. However, this petition was rejected by the CCI.
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