Days after CCI approved Amazon and Samara Capitalâ€™s acquisition of More supermarkets, the Confederation of All India Traders (CAIT) has raised objections over the proposed takeover. CAIT claims that the deal is a clear case of circumventing the FDI Policy in e-commerce, making a mockery of the policy.
CAIT has urged Commerce Minister Suresh Prabhu to order a probe in to the deal immediately. It also wants the deal to be held till a probe is conducted.
On Friday, Competition Commission of India (CCI) approved the acquisition Aditya Birla Retail Ltd (ABRL), which runs More supermarkets by Witzig Advisory Services Private Ltd (WASPL) and also the acquisition of 49 per cent of its stake by an Amazon subsidiary.
"CCI approves acquisition of 99.99 per cent of the equity share capital of Aditya Birla Retail Limited (ABRL) by Witzig Advisory Services Private Limited," it tweeted.
CAIT, in a statement issued by its National President B C Bhartia and Secretary General Praveen Khandelwal, said that multi-brand retail by foreign funded companies is not allowed anywhere in India and that there are several terms and conditions related investing by such companies.
â€śBy creating a complex holding structure, Amazon will be acquiring a 49% stake in Witzig Advisory Services, currently owned by Samara Capital, which is a personal company of 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 Birla,â€ť CAIT said.
Kumar Mangala, Birla is the chairman of the Aditya Birla Group.
â€śIt is highly regretted that CCI has approved the combination based on the "competition aspect" of the deal. However, we are surprised how an illegal deal be approved only on competition aspect. DIPPâ€™s current rules are loose and it seems that anyone who is willing to circumvent rules can create a complex ownership structure and carry on business in India,â€ť CAIT added.
In past too, CAIT raised objections to Walmart acquiring a majority stake in Flipkart, claiming that the Flipkart deal will destroy the retail trade of India. It even took the matter to court and also called for a 'Bharat Trade Bandh' in September last year.