CAIT demands probe in Amazon’s indirect acquisition of Aditya Birla ‘More’
today Jan 22, 2019
The Competition Commission of India’s (CCI) approval to Samara Capital-backed Witzig Advisory Services for the acquisition of Aditya Birla Group’s retail store business has not gone down too well with the traders in India.
As Amazon owns 49 percent stake in Witzig, the traders in India feel that the company has violated the foreign direct investment (FDI) policy in e-commerce and demanded a probe in the deal.
Confederation of All India Traders (CAIT) has demanded a stay in the takeover as they feel the deal is illegal.
Traders continue to be apprehensive as they feel through this deal Amazon is trying to gain an indirect entry into the retail trade market, which is likely to affect the small and medium traders.
Commenting on the issue, Praveen Khandelwal, secretary general, Confederation of All India Traders (CAIT), said in a statement, “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 daylight.”
“While the CCI has approved the combination based on the “competition aspect” of the deal, going by the recent policy it should be deemed illegal. There is an urgent need to look into the issue and the CAIT has urged the commerce minister 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,” he added.
Despite U.S.-based Amazon’s investment in Witzig, the business is legally considered an Indian entity, as per current FDI laws because Amazon will hold a minority stake of 49 percent.
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