Traders’ body Confederation of All Indian Traders (CAIT) has asked the Union Commerce Minister Suresh Prabhu to order a probe into the Witzig-Amazon joint acquisition of the More supermarket chain belonging to Aditya Birla Retail Ltd (ABRL), reports Business Standard. Note that this deal was approved by the CCI only last week.
CAIT claims that the deal is a clear case of circumventing the FDI Policy in e-commerce and urged Prabhu to stay the acquisition and order a probe into the deal. CAIT further said that it is “highly regretted” that the CCI approved the deal on the competition aspect of the deal, and that CAIT is “surprised how can an illegal deal be approved by only the competitive aspect.”
CCI’s approval
The matter had gone to CCI after the regulator sought more detail from Samara Capital earlier this month about whether the deal was compliant with the new FDI Policy in e-commerce. The new policy does not allow entities owned by the marketplace or its group companies to trade on the platform. The CCI has not yet released a detailed order of the approval.
The deal involves Witzig Advisory Services buying the equity share capital of Aditya Birla Retail Ltd. Amazon was to acquire a 49% stake in the company via its subsidiary Amazon NV Investment Holdings LLC, while Samara would remain the controlling entity with a 51% stake. Note that Witzig is a wholly-owned subsidiary of Samara Alternative Investment Fund.
Aditya Birla Retail Ltd currently operates 523 More supermarkets and 20 hypermarkets selling FMCG, groceries, and daily consumer goods in hyperlocal stores. Note that More is already a seller on Amazon’s grocery delivery vertical Prime Now. With this acquisition, Amazon is likely looking at offline expansion, strengthening its retail arm and logistics.
CAIT: E-commerce players must show FDI compliance papers
Last week, CAIT also wrote to Suresh Prabhu asking that e-commerce players should be asked to furnish certificates declaring that they are compliant with the new FDI policy in e-commerce, per the Economic Times. He also wrote that the those who cannot produce the certificates should not be allowed to raise funds, and operations of such platforms be suspended. The body also said that global e-commerce players have launched a “vested interest campaign” demanding changes in the FDI in ecommerce policy.
Read the new FDI in E-commerce Policy here and about the Amazon-Samara-Witzig deal to buy More here.
