NEW DELHI: Traders body CAIT raised objections Tuesday Aditya birla Fashion and Retail plans to raise Rs 1,500 crore by issuing 7.8 percent stake to Walmart Flipkart Group, claiming that the proposed deal violates the government’s FDI policy.
The Confederation of Traders of India (CAIT) wrote to the Minister of Commerce Piyush Goyal in this sense urging him to prohibit Aditya Birla Fashion and Retail Ltd (ABFRL) from the direct or indirect sale of its inventory on the market platforms owned / controlled by Flipkart Group.
He also asked the minister “not to allow the proposed FDI unless they agree that ABFRL will not sell their inventory through any of the market platforms owned or controlled by Flipkart Group, owned by Walmart.”
ABFRL did not immediately offer any comment.
Last week, ABFRL said its board approved the proposed stake sale.
ABFRL said it plans to use this capital to strengthen its balance sheet and accelerate its growth trajectory.
The company said it has also held a trade agreement in relation to the sale and distribution of its various brands. The transaction is subject to customary and regulatory approvals.
“In its presentation to the stock exchange, it shows a clear intention to make ABFRL a preferred seller in the markets owned and operated by Flipkart Group, which is in strict violation of government policy,” CAIT said in the letter to Goyal.
The merchants body stated that current FDI policy clearly prohibits a foreign company from engaging in any form of multi-brand retail (MBRT), including through e-commerce, having equity stakes in sellers on the marketplace platform, or directly / indirectly controlling your inventory through side agreements or under the guise of B2B e-commerce.
He said that the “restrictive provisions in FDI policy, through press release 2 of 2018, were made to protect small kirana traders / traders and Indian industry from the onslaught of capital deception by multinational companies. foreign nationals and any violation of that provision must be dealt with strictly. ” with”.
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