In a recent decision under the Competition Act, 2002 the Competition Commission of India has imposed a fine of ₹4,00,000 on CA Plume Investments and Bequest Inc. following an incorrect Green Channel filing made in connection with their purchases of equity in Quest Global Services Pte. Ltd. The penalty was based on a breach of Section 43A of the Act.
Factual background
The transaction: The two acquirers submitted a joint notice under Section 6(2) and the relevant combination regulations seeking clearance for multiple elements of a single deal. CA Plume Investments sought to acquire up to 23.6 percent of the target’s equity while Bequest Inc. planned to take roughly 9.17 percent. The overall transaction package also included a buyback component. The parties used the Green Channel procedure, which allows a filing to be treated as approved automatically under Section 31(1) when certain overlap and competition concerns are absent.
The parties: CA Plume Investments is a Mauritius investment vehicle ultimately controlled by funds advised by affiliates of The Carlyle Group Inc. Bequest Inc. is a Cayman Islands holding company linked to Mr. Ajit Aravind Prabhu who is the cofounder and CEO of the target. The target itself is a Singapore company providing engineering and research and development services across sectors such as aerospace, automotive and healthcare.
Legal framework
The filing obligations required notification under Section 6(2). The Green Channel rules are set out in Regulation 5A and Schedule III of the Combination Regulations, which allow deemed approval provided there are no horizontal overlaps meaning similar or substitutable products or services no vertical links across different stages of the production chain and no complementarity where products or services are typically used together. Section 43A deals with penalties for failure to notify a combination and Section 44 addresses penalties for false or misleading statements in filings.
How CCI Proceeded
Initial review: When the Commission examined the notice it identified potential vertical and complementary overlaps between businesses in the acquirers’ portfolios and the target. Those potential overlaps meant the transaction did not satisfy the Schedule III conditions and therefore was not suitable for the Green Channel.
Show cause notice: On 30 April 2024 the Commission issued a show cause notice under the Green Channel rule and the penal provisions seeking explanation on why the filing should not be treated as void from the start and why penalties should not follow for the incorrect declarations.
Acquirers’ Response: The acquirers responded by saying the overlaps were discovered only after the filing and arose from the complexity of the target’s business lines. They said the deal was completed only three months after the deemed approval period. They pointed to Carlyle’s clean compliance record with 13 prior filings and described the overlaps as immaterial from a competition standpoint. They also characterised the mistake as an inadvertent bona fide error that was voluntarily disclosed. The acquirers relied on the amended provisions in the Competition (Amendment) Act 2023 which allow a refile within 30 days without a penalty but the Commission considered the earlier legal framework to be applicable in this instance.
CCI Findings
The Commission concluded the combination did not meet the Schedule III criteria for Green Channel treatment. It declared the deemed approval void ab initio under Regulation 5A(2). The conduct was held to amount to a contravention of Section 43A but not of Section 44, the latter because the Commission accepted that the mistake was bona fide and not a deliberate falsehood.
Penalty and directions
A monetary penalty of ₹4,00,000 was imposed under Section 43A. No separate penalty was imposed under Section 44. The acquirers were ordered to pay the penalty within 60 days and to file a fresh notice under Regulation 8 of the Combination Regulations within 30 days.
The Takeaway
The decision is a clear reminder that parties relying on the Green Channel must undertake thorough diligence and make accurate disclosures. The Commission balanced enforcement with recognition that honest, voluntary errors can occur but at the same time reaffirmed that procedural compliance under the Act is essential.
CCI Order dated 26/06/2025 (CA Plume Investments and Bequest Inc.)