New Delhi, Jan 22 (KNN) The Confederation of All India Traders (CAIT) has highly objected the proposed takeover of More by Amazon and urged commerce minister Suresh Prabhu to order a probe into Witzig-Amazon bid to acquire Aditya Birla Retail Ltd, which operates supermarket store chain 'More'.

In a statement, CAIT alleged “It is a clear case of circumventing the FDI Policy in e commerce and paving the way for others to follow.”

Recently, Competition Commission of India (CCI) approved the acquisition Aditya Birla Retail Ltd (ABRL), which runs More supermarkets by Witzig Advisory Services Private Ltd (WASPL) and also the acquisition of 49 per cent of its stake by an Amazon subsidiary.

"CCI approves acquisition of 99.99 per cent of the equity share capital of Aditya Birla Retail Limited (ABRL) by Witzig Advisory Services Private Limited," it tweeted.

Disappointed with the proposed takeover, CAIT said that multi brand retail by foreign funded companies is not allowed in all states of India. Further there are many terms and conditions related to disbursement of investment by such companies for creating back-end infrastructure and sourcing goods from MSMEs.

By creating a complex holding structure, Amazon will be acquiring a 49% stake in Witzig Advisory Services which is currently owned by Samara Capital which is a personal company of Shri Kumar Mangalam Birla. Witzig which is an Indian company, will then acquire a 99.99% stake of More from Aditya Birla Retail (also majorly owned by Shri Birla), CAIT added.

The traders’ body said that this is nothing but a practice of circumvention of FDI policy in order to carry on food retail and multi brand retail in India through online and offline mode of sales.  

It is highly regretted that CCI has approved the combination based on the "competition aspect" of the deal.

However, it said “We are surprised how an illegal deal can be approved only on "competition aspect". It is again regretted that DIPPs current rules are loose and it seems anyone and everyone who is willing to circumvent rules can create a complex ownership structure and carry on business in India.”

CAIT said “We oppose the deal and government should use all its powers to act before it becomes a diplomatic situation.It is more dangerous that any foreign company can use such circumvention to enter any restricted business like defence. Is government ready to allow such exploitation?”