Question: Under which act CCI has approved demerger of the textiles business of GHCL Ltd. (“GHCL”)into its wholly owned subsidiary“GHCL Textiles” ?
(a) Section 31(1) of the Competition Act, 2002.
(b) Section 21(1) of the Competition Act, 2002.
(c)Section 11(1) of the Competition Act, 2002.
(d) Section 41(1) of the Competition Act, 2002.
Answer- (a)
Related facts
Context
- CCI has recently (September 2020) approved demerger of the textiles business of GHCL Ltd.(“GHCL”) into its wholly owned subsidiary “GHCLTextiles” under Section 31(1) of the Competition Act, 2002.
GHCL
- GHCL is a public limited company incorporated in India and is stated to be engaged in the business of (i) manufacture and sale of inorganic chemicals including but not limited to Soda Ash (Dense grade and Light grade), Sodium Bicarbonate, Industrial Salt and Consumer Products (‘Chemical Business’) and (ii) manufacture and sale of textiles including but not limited to yarn manufacturing along with weaving, processing, cutting and sewing of home textiles products (‘Textiles Business’).
GHCL Textiles
- GHCL Textiles is a Public Limited Company incorporated in India. Presently, GHCL Textiles Ltd. is a wholly owned subsidiary of GHCL.
- It is a newly incorporated company and has not initiated any business activity.
- Pursuant to the proposed demerger, GHCL will retain its chemicals and consumer products business and GHCL Textiles will have the demerged Textiles business.
CCI
- The Competition Act, 2002, as amended by the Competition (Amendment) Act, 2007, follows the philosophy of modern competition laws.
- The objectives of the Act are sought to be achieved through the Competition Commission of India(CCI), which has been established by the Central Government with effect from 14th October 2003.
By — Pankaj Pandey.