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Amazon's JV with Catamaran in Prione undergoes rejig; Cloudtail making a comeback

Press Trust of India  |  New Delhi 

Amazon's with Catamaran Ventures, Prione Business Services, which runs one of in's largest sellers Cloudtail, has been restructured to meet compliance with new FDI rules for introduced earlier this month, according to sources.

Sources said has hiked its stake in Cloudtail's parent company Prione Business Services, with Amazon's holding coming down from 49 per cent to 24 per cent stake.

With this, ceases to be an group company, and can continue selling on Amazon's marketplace in India, sources added.

In a statement, said that Catamaran has always been fully compliant with every law and will continue to do so in the future.

"...on December 26, 2018, the revised the laws governing marketplaces. On February 6, 2019, Catamaran has effected the required changes to be 100 per cent compliant with PN2 (Press Note 2). We regret the inconvenience caused to our suppliers and customers due to the stoppage of the operations of between February 1, 2019 and February 6, 2019, Laxminarayan said.

The statement, however, did not divulge details of the nuances of the equity rejig that was undertaken.

Another large seller is also expected to return to in after the restructuring is completed, the sources said.

is a subsidiary of - a company where is the majority holder while Amazon is the minority share holder.

Meanwhile, the Confederation of All Traders (CAIT) has alleged that the Amazon's latest move is a "circumvention of new rules".

"CAIT has taken a very serious note of reports of Amazon reducing its stake in Prione thus trying to disassociate itself from Cloudtail," CAIT said in a statement dubbing the latest rejig as alleged circumvention of new norms.

CAIT said it will approach the demanding that the government again clarify that online should not hold direct, or indirect stake, in its vendors.

When contacted, said in a statement that it remains committed to complete compliance with all the laws of the land, including Press Note 2.

"We have no equity participation in any seller company on our marketplace nor does any seller buy more than 25 per cent of its inventory from our wholesale business," the statement added.

The government has announced new regulations that would bar with foreign investments from selling products of the where they hold stakes, and ban exclusive marketing arrangements.

Another provision states that the inventory of a vendor will be seen as controlled by a marketplace, if over 25 per cent of the vendor's purchases are from the marketplace entity, including the latter's wholesale unit.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, February 07 2019. 18:40 IST