This comes after the appeal filed by Confederation of All India Traders for the reversal of CCI’s approval for the Walmart-Flipkart deal.

NCLAT asks Walmart Flipkart to explain business model in India issues notice
Atom Walmart-Flipkart Friday, September 07, 2018 - 16:20

Nearly a week after the Confederation of All India Traders approached the National Company Law Appellate Tribunal (NCLAT) against the Competition Commission of India’s (CCI) approval for Walmart-Flipkart deal, NCLAT has issued a notice to Walmart enquiring about its business model in India.

The notice dated September 6, which TNM has a copy of, says, “Before going into the merit of the appeal, we intend to know the manner in which Wal-Mart International Holdings, Inc. and Flipkart Private Limited do their business in the relevant market in India.”

Walmart will be expected to respond by September 20, 2018. Post this, CAIT will be given a week’s time to file its response to Walmart.

CAIT approached NCLAT last week appealing for the reversal of CCI’s approval for the Walmart-Flipkart deal.

"In its appeal, the CAIT has prayed for reversing the order of CCI as no opportunity of hearing was given by CCI to CAIT, which made valid objections on merit, as also overlooking the violation of basic fundamentals of Press Note 3 of the Government," the Confederation said in a statement at the time of filing the appeal.

It also filed a detailed objection against the CCI, claiming that the deal would lead to vertical integration in the market and that it would affect other wholesalers on the platform (Flipkart) and potentially eliminate them in the long run “by using several methods such as creation of algorithms perpetuating a search bias in favour of Walmart, and the creation of preferred sellers who would be receiving commissions and discounts which would not be available to other sellers on the platform.”

Walmart had announced in May that it will be acquiring 77% stake in Flipkart. The deal was completed on August 18, which made Walmart the largest shareholder in the Flipkart Group. Flipkart group also includes its other businesses such as Myntra and Jabong.

The remainder of the business is held by other shareholders, including Flipkart co-founder Binny Bansal, Tencent, Tiger Global and Microsoft Corp.

Walmart's investment includes $2 billion of new equity funding to help accelerate the growth of the Flipkart business and both companies will retain their unique brands and operating structures in India.

CAIT, along with other trade bodies and seller organisations such as Swadeshi Jagran Manch and All India Online Vendors Association, have been protesting against the deal.

The traders’ body is also planning to go on a nationwide strike against the deal on September 28. It has called for a 'Bharat Trade Bandh' and expects about 7 crore traders across country to take part in the strike.

Also read: Traders' body CAIT to go on nationwide strike against Walmart-Flipkart deal on Sep 28

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