Online merchants association asks government to pause Snapdeal merger

Shivam Srivastav May 15, 2017

E-commerce marketplace Snapdeal’s impending merger agreement with rival Flipkart may run into stormy waters as an association, which represents 2000 online sellers, has written to the Indian Corporate Affairs Ministry asking it to put a hold on any potential deal unless it is approved by 75% of the sellers doing active business on the platform.

The All India Online Vendors Association (AIOVA) has written an email to Tapan Ray, Secretary, Corporate Affairs Ministry, stating that the organisation has been receiving formal and informal complaints from sellers across the country with regards to disputed payments with Snapdeal.

“We would like to inform you via this email that more than 500 sellers have complained to us regarding unsettled financial matters with the current management of Snapdeal,” AIOVA wrote in the mail.

The organisation said it had asked the government for help in settling the matter earlier as well, and had previously written to Nirmala Sitharaman, minister of state for commerce and industry.

Now since thereported $950 million deal is on the verge of being signed, the association is accusing Snapdeal of not even acknowledging the issue.

“We also believe that such marketplaces are pseudo private companies and should be treated at par with public companies as public at large is interested in these companies,” AIOVA wrote.

The association said that it had submitted a list of retailers who were awaiting payment to the management of Snapdeal informally in March, but no action was taken by the company. “Our members are already riling with the losses faced in Askmebazaar. Now they feel they will face loss in Snapdeal under the new management,” AIOVA wrote in the mail, referring to the August 2016 closure of e-commerce company AskmeBazaar, which also left many sellers high and dry. It is not known whether these dues have now been cleared.

We have reached out to Snapdeal for comments and will update the story as in when we get their response.