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The National Company Law Appellate Tribunal (NCLAT) has sought information from US retail major Walmart and Flipkart about their business models in India.
The Tribunal was hearing an appeal filed by the Confederation of All India Traders (CAIT) challenging the Competition Commission of India’s (CCI) decision to approve the Walmart-Flipkart deal.
It has asked Walmart International Holdings Inc to file its reply by September 20. At the same time, it has asked CAIT to submit an affidavit outlining its understanding about Walmart’s business model in India within a week.
“Before going into the merit of the appeal, we intend to know the manner in which Walmart International Holdings Inc and Flipkart Pvt Ltd do their business in the relevant market in India,” said an NCLAT Bench headed by Justice SJ Mukhopadhaya.
“The appellant (CAIT) may file relevant list of dates and their understanding of sales by Respondent No. 2 (Walmart International) by way of an additional affidavit within a week thereof,” the order stated.
The NCLAT has next listed the matter on October 5 “for admission” of CAIT appeal.
In its appeal, CAIT asked for a reversal of the CCI order as no opportunity of hearing was given by the CCI to CAIT which made valid objections on merit and has also alleged that the proposed combination would lead to a huge degree of vertical integration in the market.
Last month, Walmart Inc announced that it had completed its $16-billion acquisition of Flipkart, making it the largest shareholder in the e-commerce company after it got an approval from the CCI for the deal.
In its order, the CCI, last month, had said that the proposed combination, “is not likely to have an appreciable adverse effect on competition in India and therefore, the same is hereby approved in terms of Section 31(1) of the Act.”
However, taking into consideration third party representations and concerns, it had said that issues falling beyond the scope of the Act cannot be a subject matter of examination by the Commission, though they merit policy intervention.
Walmart India, a wholly-owned subsidiary of Walmart Inc, owns and operates 21 Best Price Modern Wholesale stores in the country.
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