CCI gives green signal to Destimoney Enterprises stake sale

NEW DELHI: The Competition Commission has approved Mauritius-based Destimoney Enterprises Ltd's (DEL) proposed sale of its Indian arm to Quality Investment Holdings, saying that the deal is unlikely to cause unfair business practices.

Under the proposed deal, Quality Investment would acquire 100 per cent stake in financial services firm Destimoney Enterprises Pvt Ltd -- Indian arm of DEL.

The deal would also result in an indirect purchase of 49 per cent stake in Punjab National Bank Housing Finance Ltd (PNBHFL), which is at present held by Destimoney Enterprises Private Ltd.

In an order released today, Competition Commission of India ( CCI) said that "the proposed combination is not likely to have an appreciable adverse effect on competition in India".

The fair trade regulator noted that Quality Investment "is an investment holding company and has no other business activities, whereas, the target enterprise (Destimoney) is a financial services company, engaged, inter alia, in the business of distribution of financial products".

It said: "PNBHFL, in which the acquirer would indirectly hold forty-nine per cent stake post combination, is engaged in providing home loans and non-home loans.

"Therefore, it is observed that there is no horizontal overlap or vertical relationship between the business activities of the Acquirer, the target enterprise and PNBHFL."

It also observed that Quality Investment is owned and controlled by affiliates of Carlyle group which has only minority, non-controlling stake in the portfolio companies in India".

According to the order while six subsidiaries of Destimoney Enterprises Private Ltd would be "hived off", the financial services firm would continue to hold its 49 per cent shareholding in PNBHFL.

The agreement was entered between the parties on November 27, 2014 following which a notice seeking CCI's approval on the deal was filed in December.