The tale of Walmart’s $16 billion acquisition of a 77% stake in e-commerce major Flipkart may have another twist. The National Company Law Appellate Tribunal (NCLAT) will hear a petition the Confederation of All India Traders (CAIT) challenging the Competition Commission of India’s (CCI) nod for the deal.
NCLAT, which is also the appellate tribunal for the CCI, has asked Walmart and Flipkart for its business model before hearings on the case begin. “Before going into the merit of the appeal, we intend to know the manner in which Wal-Mart International Holdings Inc, and Flipkart Private Limited do their business in the relevant market in India,” an order by a two-judge bench headed by Justice S.J. Mukhopadhyay stated.
Flipkart and Walmart have to file their replies by September 20. CAIT has also been allowed to file their understanding of sales undertaken by Flipkart, along with a elevant list of dates within a week. The petition has been posted for admission on October 5.
The CCI cleared the acquisition last month, paving the way for the largest deal in India’s e-commerce space. However, it did observe that complaints about the deal being in violation of foreign direct investment rules may require policy intervention. It added that such issues do not fall under its ambit and focussed solely on the effect on competition. The CCI approved the deal since it felt that the transaction will not impact competition in India adversely.
Following the approval from CCI, Walmart informed the US Securities and Exchange Commission that the transaction has been completed and it now holds a 77% stake in Flipkart.
Traders’ body CAIT has been against the deal from the beginning on the grounds that it will impact small and medium merchants. On June 2, it held protests at nearly 1,000 locations in 500 cities.