Amazon's joint venture with Catamaran Ventures, Prione Business Services, which runs one of Amazon.in's largest sellers Cloudtail, has been restructured to meet compliance with new FDI rules for e-commerce introduced earlier this month, according to sources.
Sources said NR Narayana Murthy's Catamaran Ventures 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.
"...on December 26, 2018, the Government of India revised the laws governing e-commerce 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 Cloudtail India 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.
Meanwhile, the Confederation of All India 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.
When contacted, Amazon India 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 online marketplaces with foreign investments from selling products of the companies 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.)