AIOVA seeks MCA intervention, wants Snapdeal to clear dues before sale

By

Maverick Martins

Published
May 16, 2017

The All India Online Vendor's Association (AIOVA) in a letter to the ministry of corporate affairs (MCA) has raised concerns over the proposed sale of Snapdeal to larger rival Flipkart and asked to resolve seller disputes before giving its nod for the deal.

AIOVA, which has about 2,000 sellers as members, addressed the letter to MCA secretary Tapan Ray, according to a report in the Times of India.
 
"We would like to inform you via this email that more than 500 sellers have complained to us regarding unsettled financial matters with the current management of Snapdeal. We had compiled and submitted a small list to the management of Snapdeal informally in March, however, they never acted on the same," the letter sent to Ray noted.

According to the seller association, losing money on their dues from Snapdeal would be detrimental to their business as the members are already facing significant losses from Askmebazaar winding up operations.
 
A spokesperson of AIOVA said, "Ministry of commerce has also declined to intervene in any matter. This leaves us with the option of approaching MCA to safeguard sellers' rights before any change can take place in corporate structure."

According to experts, legally, a seller or their community cannot stop the merger process unless either of these takes the company to court on a valid ground.
 
A spokesperson of Snapdeal said, "Payments to sellers are made as per pre-defined payment cycles and these continue to be made. It should be clear that payments are made only as per contractual commitments and in accordance with seller policies. Robust grievance redressal mechanisms exist to address any escalations from individual sellers."

Last week Japan's SoftBank had secured the crucial nod from co-investor Nexus Venture Partners (NVP) for sale of Snapdeal to India's largest e-commerce firm Flipkart, which is expected to be the biggest acquisition in the Indian e-commerce space.