The Competition Commission of India (CCI) has penalized Platinum Trust and TPG Upswing for their acquisition of a stake in UPL Sustainable Agri Solutions Ltd (UPL SAS) in the first-ever Green Lane rescue. Part of the UPL Group.
While a fine of Rs 5 lakh is imposed under Section 43A for “grabbing a gun” there is a fine of Rs 5 lakh for making a false declaration to the Commission while utilizing green lane facilities. The acquirer was required to pay the penalty within 60 days of the order.
In its 15-page order, the CCI concluded that the UPL SAS acquisition was not eligible for the green channel approval facility and that the green channel statement was incorrect and false in material details. In addition, the notifying party’s statements in the notice, including the notice’s statement, are false in material details.
The Platinum Trust was established under the laws of Abu Dhabi Global Market (ADGM) by a deed of settlement dated 27 January 2019. Abu Dhabi Investment Authority (ADIA) is the sole beneficiary and settlor of the trust. TPG Upswing is part of the TPG Group.
The Upswing Trust is jointly owned by subsidiaries of ADIA and TPG Inc. Upswing Trust, through its Jersey-registered trustee company Upswing Trustee Company Limited (Upswing Trustee), purchased a 5% stake in UPL SAS.
The Green Lane is an automated approval system for certain mergers, mergers and acquisitions (mergers) where there is no business overlap of any kind, whether horizontal, vertical or complementary, between the merging parties.
The Green Lane was introduced in an August 2019 amendment to the Joint Regulations.
The main advantage of the “green lane” is that the parties can effectuate the merger, ie complete the merger after filing the forms under the mechanism, without waiting for the 210-day statutory standstill obligation to be completed.
Squatting occurs when merging parties fail to notify the Competition Commission of India prior to the completion of the merger or breach the 210-day standstill obligation. Cybersquatting can also occur if a false claim is made in a notification to CCI’s notification package.
Meanwhile, the CCI emphasized in its 15-page order that the Green Lane exemption provides for certain categories of combinations to be considered approved, conceived and designed to facilitate faster clearance of combination.
CCI stated that, in essence, the green channel approval facility is a trust-based mechanism based on self-assessment and correct declaration.
“Therefore, it is the responsibility of those who choose to utilize the Green Lane to approve facilities to observe uberrima fides (maximum good faith) in utilizing the Green Lane to approve facilities and should only comply with eligible combinations of that lane.
The CCI order stated that imposing a green lane approval facility on substandard portfolios would erode and strike at the foundations of this trust-based regulatory mechanism and undermine the sanctity of its framework.
CCI also made it clear that its punishment to the acquirer was determined based on the background and overall circumstances of the case. The CCI order added that in the future, any behavior that does not comply with the conditions of the green channel will be dealt with seriously according to the law according to the specific circumstances of the case, and the relevant consequences will be investigated.
