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Walmart-Flipkart deal: NCLAT seeks to know the firms' business model

NCLAT enquired about its business model under an appeal filed against the Walmart-Flipkart deal

IANS  |  New Delhi/Bengaluru 


Law Appellate (NCLAT) has asked US retail major and e-commerce major to explain their way of doing business in

NCLAT, which is also an appellate authority over the (CCI), has asked Wal-Mart International Holdings Inc to file its reply before it by September 20, 2018. It has also asked trader's body CAIT, which has filed an appeal before NCLAT challenging the go ahead by fair regulator CCI on Walmart's $16 billion acquisition of home-grown Flipkart, to file its understanding over the Walmart's business model in "Before going into the merit of the appeal, we intend to know the manner in which Wal-Mart International Holdings, Inc. and Private Ltd do their business in the relevant market in India," said an NCLAT bench headed by Chairman Justice S J Mukhopadhaya. The further said: "The appellant (CAIT) may file relevant list of dates and their understanding of sales by Respondent No 2 (Wal-Mart International) by way of an additional affidavit within a week thereof." NCLAT has directed to list the matter on October 5 'for admission' of Confederation of All India Traders (CAIT) petition opposing approval granted by the CCI on August 8 to the Walmart-deal. Last month, while clearing Walmart's $16 billion acquisition of Flipkart, the CCI opined that complaints about the deal violating FDI rules "may merit policy intervention" but do not fall under its ambit. The CCI had said it is "not likely to have an appreciable adverse effect on competition in India and therefore, the same is hereby approved." It had observed that the complaint about Flipkart's discounting practice or preference to select e-tailers is not specific to this merger deal and is "already prevalent" in the market. Earlier, on August 18 had informed that it has completed deal with Flipkart and holds 77 per cent stake in the Indian e-commerce major. Besides, the Bentonville giant's investment includes $2 billion of new equity funding to help accelerate the growth of the Flipkart business. India, a wholly-owned subsidiary of Walmart Inc, owns and operates 21 Best Price Modern Wholesale stores in eight states in the country. Wal-Mart International Holdings, Inc is a subsidiary of Walmart Inc.

First Published: Fri, September 07 2018. 15:10 IST