CAIT asks ED to take strict action against Amazon

Amazon launches Prime Video mobile only plan at Rs 89 in India

New Delhi: The Confederation of All India Traders (CAIT ) has written to the Enforcement Directorate(ED) with all the necessary details to prove that since the beginning of Amazon in India in 2012, it has brazenly and flagrantly violated the laws, rules and regulations of the country and has caused misery to crores of small traders (by resorting to predatory pricing) who are sought to be protected by the FDI Policy and the FEMA Rules and Regulations.

Despite the constant violations no action has been taken against the Amazon because of which the seven crore traders of the country along with the workers and people connected to them are feeling cheated and left out.

Taking into account the sentiments of Indian retailers and not to forget the amount of damage caused by the foreign E-commerce giants immediate and strict action is required and CAIT demands the ED to do the needful.

CAIT National President B.C. Bhartia and Secretary General Praveen Khandelwal said that in their complaint to ED, they have provided all the proofs and documents which clearly shows how Amazon is operating in India with a hidden motive.

“We have also raised certain questions as to how Amazon through Amazon Seller Services Private Limited (‘Amazon India’) and other owned subsidiaries and benamis have been carrying on multi brand retail trading (inventory based model of e-commerce) in the garb of marketplace based model of e-commerce in complete violation of FDI Policy, Press Notes and FEMA Act, Rules and Regulations,” they added.

The simple and direct evidence of violation is that, by its own admission Amazon has invested $ 6 billion in Amazon India. Marketplace based model of e-commerce, is nothing but provision of an electronic platform for the buyers and sellers to transact.

“The e-commerce entity is allowed to provide attendant services so why does Amazon require so much of money for this Marketplace based model of e-commerce? The fact is most of the money has been used to offer steep discounts on the products sold on the platform directly or indirectly through various methods and investigation should start from here,” CAIT said.

Bhartia and Khandelwal said, “We fail to understand why even after repeated exposure, not a single action is taken by the authorities. In our communication to ED we have highlighted how Amazon has invested in More Retail Limited, a MBRT Company and has put up a ‘Front’ namely ‘Samara AIF’, not only this, how the AIF structure which has been allowed by SEBI for the purpose of pooling of money of investors for financial investment and returns has been misused to control MBRT companies which could not have been otherwise done by Amazon.It is an open fact that by shareholders’ agreements, Amazon is exercising ‘control’ over More Retail Limited. The shareholders’ agreements have never been disclosed to DPIIT or ED or RBI or to any other authority”.

They further added how the ‘Control Rights of Amazon’ over More Retail Limited have never been publicly disclose to DPIIT or ED and why there is complete non-transparency as to who are the real investors in Samara AIF, their identities are not known to any regulator in India and above all how Amazon is illegally carrying on Inventory based model of e-commerce openly. It is trite in law that what cannot be done directly cannot be done indirectly. When FEMA Regulations provide “FDI prohibited in Inventory based model of e-commerce”, Amazon cannot do it in an indirect manner.

“The very fact that the government has been forced to impose more and more restrictions is proof of the violations committed. No more proof is required. ED should immediately call for all documents and agreements from Amazon. ED, CCI and DPIIT should examine the same and punish Amazon for all the transgressions by imposing a maximum penalty that is, three times the value of the illegal investments of Rs 48,500 crores –- a penalty of Rs 1,44,500 crores must be imposed. Multinational corporations like Amazon, who think that they are above law, should not be left unpunished,” they added.

 

IANS

Exit mobile version