CAIT against Flipkart-AV Birla Fashion deal

Traders' body CAIT raised objections over Aditya Birla Fashion and Retail's plans to raise Rs 1,500 crore by issuing 7.8 per cent stake to Walmart-owned Flipkart Group, alleging that the proposed deal violates the government's FDI policy.

The Confederation of All India Traders (CAIT) wrote to Commerce Minister Piyush Goyal in this regard urging him to prohibit Aditya Birla Fashion and Retail Ltd (ABFRL) from directly or indirectly selling its inventory on the marketplace platforms owned/controlled by the Flipkart Group. It also requested the minister "to not allow the proposed FDI unless they undertake that ABFRL will not be selling its inventory through any of the marketplace platforms owned/controlled by Walmart owned Flipkart Group".

ABFRL last week said its board approved the proposed stake sale.

ABFRL said it plans to use this capital to strengthen its balance sheet and accelerate its growth trajectory.

It said it has also entered into a commercial agreement in relation to the sale and distribution of its various brands. The transaction is subject to regulatory and other customary approvals.

"In its filing to the stock exchange, a clear intent to make ABFRL a preferred seller on the marketplaces owned and operated by Flipkart Group is shown which strictly violates the policy of the government," CAIT said in the letter to Goyal.