The National Company Law Appellate Tribunal asked Walmart Inc. and Flipkart to explain their way of doing business in India after traders challenged the antitrust regulator's nod to U.S. retail giant's $16-billion acquisition of India's largest e-commerce company.
NCLAT, the appellate authority over the Competition Commission of India, has asked Walmart International Holdings Inc to file its reply by Sept. 20. It has also asked Confederation of All India Traders, which filed the appeal before the NCLAT, to file its understanding of the Walmart's business model in India.
Before going into the merits of the appeal, it intends to know the manner in which Walmart and Flipkart do their business, said a bench headed by Chairman Justice S J Mukhopadhaya.
NCLAT directed to list the matter on Oct. 5 “for admission” of the traders body's petition opposing the approval granted by the Competition Commission of India on Aug. 8 to the Walmart-Flipkart deal.
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”. The regulator 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.
On Aug. 18, Walmart had said that it has completed deal with Flipkart to acquire a 77 percent stake in the Indian e-commerce firm. Besides, the Bentonville, Arkansas giant's investment includes $2 billion of new equity funding to help accelerate the growth of the Flipkart business.
Walmart India, a wholly owned subsidiary of Walmart Inc, owns and operates 21 Best Price Modern Wholesale stores in eight states in the country. Walmart International Holdings, Inc is a subsidiary of Walmart Inc.
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