CAIT RAISED EYEBROWS ON AMAZON TAKING OVER MORE
Shimla-----The Confederation of All India Traders (CAIT) has highly objected the proposed takeover of More by Amazon. It is nothing but a clear case of circumventing the FDI Policy in e commerce and paving the way for others to follow. In other words it's a mockery of the Policy in day light.
CAIT National President Mr B C Bhartia & Secretary General Mr Praveen Khandelwal in a joint statement said that Multibrand retail by foreign funded companies is not allowed in all states of India.Further there are many terms and conditions related to disbursement of investment by such comapanies for creating back-end infrastructure and sourcing goods from MSMEs.They said that to the best of their knowledge by creating a complex holding structure, Amazon will be acquiring a 49% stake in Witzig Advisory Services which is currently owned by Samara Capital which is a personal company of Shri Kumar Mangalam Birla. Witzig which is an Indian company, will then acquire a 99.99% stake of More from Aditya Birla Retail (also majorly owned by Shri Birla.
Both Mr Bhartia & Mr Khandelwal said that this is nothing but a practice of Circumvention of FDI policy in order to carry on Food retail and multi brand retail in India through online and offline mode of sales.
It is highly regretted that CCI has approved the combination based on the "competition aspect" of the deal.However, we are surprised how can an illegal deal be approved only on "competition aspect". It is again regretted that DIPPs current rules are loose and it seems any one and everyone who is willing to circumvent rules can create a complex ownership structure and carry on business in India.
Shri Birla, and other partners of Amazon like Shri Narayan Murthy, Patni Group and others can be compared to the erstwhile royals and kings of Indian states who gave way to British Raj in India by aligning with them.
Both Mr Bhartia &!Mr Khandelwal said that We oppose the deal and government should use all its powers to act before it becomes a diplomatic situation. It is more dangerous that any foreign company can use such circumvention to enter any restricted business like defence. Is government ready to allow such exploitation? There is an urgent need to look in to the issue and the CAIT has urged the Commerce Minister Shri Suresh Prabhu to take immediate cognisance of this critical issue and order a probe in the matter and till then the takeover should be stayed.
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