Fairplay panel’s whistleblowing race may have no losers

NEW DELHI: The competition regulator is set to be lenient with all members of an alleged cartel in a bid to encourage confession. The person who makes the first confession is likely to get total amnesty, while those making subsequent disclosures are likely to get far less clemency. The idea is to trigger a race among members of a cartel to be the first to admit to the offence.

Currently, the leniency provision applies only to the first operator making disclosure. That too, only if it is made before the regulator institutes proceedings against the offender.

“The company that makes the first disclosure could get away without paying any penalty, while the one that makes the disclosure next could pay Rs 10 crore or more and escape further action. The idea is to provide an incentive to be the first to make a disclosure,” said a senior official. The proposed amendments to the competition law extend leniency to all parties making vital disclosure till the investigator submits the report.

The government also proposes to empower the director-general of investigations attached to the regulator to conduct search and seizure without approaching the Centre. The investigator only needs the permission of the commission and the chief metropolitan magistrate in New Delhi, irrespective of where the operation is conducted.

The commission, however, is unlikely to be a super-regulator among various sectoral watchdogs. The ministry of corporate affairs is also introducing provisions for sectoral regulators such as Sebi and Trai to seek CCI’s opinion within a specified time. The commission could also ask for their opinion in the same way.

This is expected to remove any possible friction between regulators in cases where different laws apply and when approvals are required from different bodies. For instance, power distribution companies are required to get the approval of appropriate electricity regulatory commission for any merger.

Since CCI has the mandate to regulate mergers, communication with its counterpart in the power sector would remove possible tussle over jurisdiction.