NCLAT upholds NTPC's CCI penalties for failing to disclose its acquisition of a stake in Ratnagiri Gas

 NCLAT upholds NTPC's CCI penalties for failing to disclose its acquisition of a stake in Ratnagiri Gas

NCLAT upholds NTPC's CCI penalties for failing to disclose its acquisition of a stake in Ratnagiri Gas

In 2020, NTPC purchased equity shares in RGPPL from its lenders in return for making specific repayments. Its ownership stake in Ratnagiri Gas rose from 25.98% to just over 60% as a consequence of this transaction.

NTPC said that it has not obtained any new rights and that it would continue to share ownership of RGPPL with GAIL and the Maharashtra State Electricity Distribution Company Limited even after the deal is completed.

The Competition Commission of India (CCI) had fined National Thermal Power Corporation (NTPC) Rs 40 lakh for failing to disclose the purchase of 35.47 percent of the equity share capital. However, the National Company Law Appellate Tribunal (NCLAT) has now halted the CCI's penalty. have submitted an application. RGPPL, or Ratnagiri Gas and Power Private Limited

The penalty has been postponed, citing the NCLAT judgment, since NTPC "deposited fixed deposit advice of Rs 10 lakh drawn on State Bank of India, which is 25 per cent of the total penalty amount." It is now anticipated that this case will go to trial on February 27, 2024.

In 2020, NTPC purchased equity shares in RGPPL from its lenders in return for making specific repayments. Its share capital in RGPPL rose from 25.98% to just over 60% as a consequence of this transaction. As a result, NTPC became RGPPL's largest shareholder. Following the discovery of this transaction, CCI had written to NTPC to inquire as to why the latter had purchased the equity share capital of RGPPL without notifying anybody.

In accordance with the Competition Act, businesses must get authorization from CCI prior to purchasing a majority interest in another firm operating in the same industry. If this kind of permission is not acquired, CCI will penalize you.

The purchase of a 35.47 percent share in RGPPL was disclosed by NTPC to the regulator as part of the company's resolution plan to pay off its outstanding debt during the CCI proceedings. Furthermore, NTPC informed CCI that its main goal was to pay off its debt and that it had no intention of gaining control or stock in RGPPL. NTPC claims that it did not get any new rights and that it continues to share control of RGPPL with GAIL and the Maharashtra State Power Distribution Company Limited even after the deal is completed.

But according to the CCI, unless the Indian government expressly exempts them from doing so, these transactions must be reported. The CCI went on to say that it should have been informed even if NTPC had gained more control and the deal had not led to unfair competition in India. As a result, NTPC was fined Rs 40 lakh by CCI.