Dec 17, 2021
CAIT urges government to ban Shopee for alleged FDI violations
Dec 17, 2021
The Confederation of All India Traders has appealed to the central government and asked it to ban Chinese e-commerce business Shopee from operating in India through its SPPIN India Pvt Ltd entity.
On December 16, CAIT called for an immediate ban on Shopee’s operations in India and accused the business of violating a 2020 foreign direct investment press note and FEMA rules, ET Bureau reported. CAIT stated that the business violated the 2020 regulation that any country sharing a land border with India or owned by someone from such a territory can only invest in India through a government route.
CAIT has argued that Shopee has violated this FDI rule as its business SPPIN India Pvt Ltd is held by two holding companies, SPPIN I Pvt Ltd and SPPIN II Pvt Ltd, which are both registered in Singapore, but they are ultimately owned by the Chinese business, according to CAIT.
“These two entities are in turn held by another parent company SPPIN Ltd, registered in the Cayman Islands,” wrote CAIT in a letter to Union Finance Minister Nirmala Sitharaman, Indo-Asian News Service reported. “This complex structuring of entities is nothing but an attempt to hoodwink the Indian government and infuse Chinese funds into India.”
CAIT has also accused Shopee of using ‘predatory pricing’ to the detriment of Indian competitors. Shopee retails a wide, multi-brand selection of products in India from fashion and footwear to cosmetics and electronics.
“As such, I request you to examine, enquire (sic) and take necessary action as may be deemed appropriate in law against the mobile application, Shopee and the corresponding website, www.shopee.in, and all similarly situated entities, including SPPIN India Private Ltd,” wrote CAIT.
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