The traders body, CAIT, Confederation of All India Traders has accused Narayana Murthy of helping Amazon circumvent Indian laws.
It has demanded, in a letter written to Piyush Goyal, Minister of Commerce and Industry, to investigate into the matter.
Preferred Vendor Model Of Amazon
In India, it is not allowed for marketplaces to sell their own inventory to the consumers. Preferred vendor model, hence has been devised by E-commerce companies. Atleast till 2019, almost two third of Amazon’s business came from 35 preferred vendors on its platform as per the recent report of Reuters.
Cloudtail has been a joint entity between Amazon and Narayan Murthy’s Catamaran Ventures. It also happens to be a preferred vendor of Amazon.
Cloudtail did a rejig post he government’s 2018 clarification and the introduction of Press Note 2.
Catamaran Ventures, in February 2019, raised its stake in Cloudtail’s parent company Prione Business Services eventually raising the stake of Catamaran Ventures to 76 percent from 51 percent earlier and reducing Amazon Asia’s stake in Cloudtail to 24 percent from the earlier 49 percent.
Post this, Cloudtail stopped serving the the purpose with which the norms were straightened and ceased to be an Amazon group company.
Banks Also Dragged Previously By CAIT
Not just Catamaran Ventures, Confederation of All India Traders have also accused HDFC Bank and State Bank of India for partnering with Amazon. These banks have been dragged for giving shopping advantage to people for purchasing goods exclusively from Amazon and other e-commerce companies.
People who buy from e-commerce sites are given offers in form of cash backs. However, these offers are not available to those with offline stores.
CAIT said in a statement that marketplace is a myth created by Amazon as despite the fact that the marketplace (Amazon) should have no relation or control over the retailer (Cloudtail) as per the policy of the government, it is not the case.
It added that since for all the orders Amazon decides which seller shall get the order, the order is forwarded for delivery to sellers who are either in indirect or direct control of Amazon
CAIT has also alleged that many senior employees even managing directors, in Cloudtail as well as Prione Business Services, are former employees of Amazon.
CAIT also said that one of the top corporate of the country, Mr. Narayana Murthy is fully conversant with the operations of Cloudtail and has no dissent which is much against the provisions of Press Note No.2 of the FDI policy. Mr. Narayana Murthy owns 76% in Prione. Prione owns 100% of Cloudtail yet the board of directors have Amazon in majority but the company is controlled, managed and operated by persons who were formerly employed with Amazon.
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