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Amazon settles for 17% voting rights in ‘More parent’

The new FDI norms forbid e-commerce marketplace to use its platform to sell goods of entities it has stake in or have control over sellers’ inventory

Apr 3, 2019 by The Passage Team
Amazon settles for 17% voting rights in ‘More parent’

India’s FDI law in multi-retail has forced Amazon India to split its 49% stake in Witzig Advisory Services that owns multi-retail store More.

According to Witzig’s filing with the Registrar of Companies (RoC), Amazon has bought 17% stake in Witzig Advisory Services through Class A shares and 32% through Class B shares.

While Amazon got one voting right in Witzig through 17% stake in the Class A share, while Class B shares come with no voting rights.

Amazon has used DVR (different voting rights) shares to comply with new ecommerce FDI norms and to ensure More can continue selling on its platform, an Economic Times report suggested.

The new FDI norms forbid e-commerce marketplace to use its platform to sell goods of entities it has stake in or have control over sellers’ inventory.

Witzig Advisory Services acquired More supermarket stores from the Aditya Birla Group in last September.

“Amazon and Samara Capital have agreed to co-invest in a facilities support and management and value-added services company called WASPL. Both Samara and Amazon see significant growth potential in the area of facilities support and management and valued added services in the coming years,” an Amazon spokesperson said in an email statement at the time of acquisition.

More is the fourth-largest supermarket chain in the country after Reliance Retail Ltd, Future Group and D-Mart.

Samara Capital will hold 51% in Witzig, making the latter an Indian owned-and-controlled company. Two step-down subsidiaries of Amazon’s financial investment arm Amazon.com NV Investment Holdings LLC — Coda Holdings Singapore and Coda Holdings 3 LLC — will hold 48% and 1%, respectively, as per RoC filings.

Amazon paid Rs 1,988 crore for this shareholding and closed the deal on March 28, ET reported.

"Samara Capital will be the majority shareholder of Witzig, and all operations of Witzig will be managed by Samara Capital. The management of Witzig will be appointed by its board of directors," an Amazon spokesperson said.

Witzig director Paurush Roy told ET that Samara will manage and operate the former through a dedicated team of professionals. “More is led by veterans in the retail space and further supported by an experienced and capable management team,” he said.

The Passage Team

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