Alerts & Updates 4th Oct 2024
On September 10, 2024, various amendments to the Competition Act, 2002 came into effect. Two of these amendments have a significant impact on Alternative Investment Funds registered with SEBI. Prior to the recent amendments, any acquisition by a venture capital fund was exempt from the provisions of the Section 6 of the Competition Act. Now, this exemption has been expanded to cover all sub-categories of Category I AIFs. However, it should be noted that Category II and Category III AIFs still do not benefit from this exemption. The new amendments have widened the definition of control and henceforth, ‘control’ means the ability to exercise material influence, in any manner whatsoever, over the management or affairs or strategic commercial decisions. ‘Control’ has always been a nebulous concept under the Competition Act, 2002 and the new definition of ‘control’ means that henceforth it is much more likely that AIFs will be deemed to have control over their investee companies. Our alert delves in the two aforementioned amendments in greater detail.
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