Infibeam fires auditor, claims leak of price-sensitive info

Mumbai: The simmering cold war between Infibeam Avenues, the first listed e-commerce company in India, and one of its main auditors, SRBC & Co LLP, an arm of the global major Ernst & Young (EY), is finally out in the open. On Sunday afternoon, after Infibeam issued a statement removing SRBC as its joint statutory auditor with an accusation of passing on unpublished price sensitive information (UPSI), the audit firm denied any wrong doing in the matter and said it was open to a third-party audit.

Infibeam said its board of directors had in its meeting on Sunday recommended — subject to regulatory approvals and shareholders’ nod — termination of the services of its joint statutory auditor SRBC “on the grounds of sharing company’s UPSI with personal email accounts of their team and third party on multiple occasions leading to breach of trust and loss of faith”. It said the same has been verified and confirmed by the auditor after an internal investigation.

On its part, SRBC said that it was strongly denying Infibeam’s allegations. “We have conducted a comprehensive investigation and stand by our findings. We are confident of our position and are open to a third party/regulatory inspection and will respond to the regulators, as required,” the statement said.

According to sources, since mid-2018, SRBC had been qualifying the accounts of Infibeam. It had also flagged a whistleblower’s letter around the same time and had asked the company to investigate the same. Then in the September quarter, Infibeam had brought in a joint auditor, Shah & Taparia, despite the account not being a large one. The qualifications by the statutory auditors made the company uncomfortable. “It was easy for EY to walk out, but it had decided to complete the work,” a person familiar with the development said.

Subsequent to auditor qualification and fears about its business model among investors, on September 28, the Infibeam stock crashed 70% in a day, falling from Rs 198 to Rs 59. On Friday, the stock closed at Rs 43. Infibeam is yet to announce its January-March quarterly and fiscal 2019 results.

US commerce secretary Ross to raise India's e-commerce rules in talks

"Ross is coming to participate in the Trade Winds Indo-Pacific Forum and Mission and would hold bilateral meeting with Prabhu," one of the sources said.

NEW DELHI: US commerce secretary Wilbur Ross said on Monday he plans to discuss India’s new e-commerce rules that could have an impact on operations of firms such as Amazon and Walmart with his Indian counterpart on Monday.

Ross is visiting New Delhi at a time when India and the United States are locked in disputes over tariffs, price caps India has imposed on imported US medical devices and over rules banning companies from selling products via firms in which they have an equity interest.

India also prohibits companies from making deals with sellers to sell exclusively on their platforms, rules which could affect investment plans of foreign firms in India’s fast-growing market set to touch $200 billion by 2027.

Ross told reporters he would discuss e-commerce with India’s commerce minister, Suresh Prabhu.

Two trade ministry sources said India was hoping for a breakthrough in the talks.

“We are negotiating and we want there to be some breakthrough because India has stakes and they are one of the biggest partners and this is an opportunity to de-escalate tensions,” one of the sources said.

In March, US President Donald Trump announced plans to end preferential trade treatment for India that allows duty-free entry for up to $5.6 billion worth of its exports to the United States.

India is the world’s biggest beneficiary of that trade concession, called the generalised system of preferences (GSP), and its withdrawal would be the strongest punitive action against the country since Trump took office in 2017.

India wants the United States to review its decision on GSP and also hopes the it will defer its decision to withdraw trade privileges until India’s general elections are over on May 19, one of the sources said.

Political and security ties between India and the United States have developed but trade has become a problem. Indian officials said both sides are likely to emphasize strategic ties and try to manage trade differences.

“The messaging is a re-assurance that the US thinks of India as a strategic partner and the relationship cannot be colored by differences on trade,” one of the sources said.

Total US trade with India stood at $87.5 billion in 2018, with the deficit at $21.3 billion.

India has held off implementation of new tariffs on US goods after Washington refused to give it an exemption on higher steel duties.

Ecommerce on agenda at Delhi WTO meet

E-commerce negotiations at the multilateral level will be a key area of talks at the informal World Trade Organization (WTO) ministerial meeting which will take place in Delhi later this month.

At the informal ministerial, at least 20 developing countries and least developed countries will discuss how realistic it is to assume that they can “effectively and meaningfully influence” the outcome of negotiations on free flow of data across borders, server localisation and source code disclosure.

“There will be a session on implications of joining the negotiations on e-commerce at the WTO where a lot of pertinent questions on digital trade would be raised,” an official told ET on condition of anonymity.

The participating countries will deliberate the concrete gains for them from negotiating binding rules on e-commerce and the revenue implications of a permanent moratorium on customs duty on electronic transmissions.

They will also debate the pros and cons of retaining policy flexibility to nurture their domestic digital firms or if they would be better off with binding rules.

In its draft National E-Commerce Policy, India has proposed regulating cross-border data flows, locating computing facilities within the country to ensure job creation and setting up a dedicated data authority for issues related to sharing of community data. It has stated that the data generated in the country is a national asset and citizens and the government have a sovereign right over it.

 
The Delhi ministerial meeting comes at a crucial time when a group of 76 countries including the United States, European Union nations, China, Japan and Australia have formed a plurilateral to develop trade rules on ecommerce, an idea that has been opposed by India and other developing countries.

India has argued that these discussions are not consistent with the mandate of the multilateral trading system and that these strike at its roots.

Although India is opposed to the plurilateral on e-commerce, it has told the WTO that it would pursue the existing multilateral work programme that prohibits countries from imposing customs duties on electronic transmissions, something that India and South Africa have questioned, citing revenue loss to developing countries.

The two-day discussions are likely to culminate in a Delhi Declaration on development and WTO reforms as the organisation’s director general, Roberto Azevêdo, would attend the meeting on May 13. “There could be a declaration at the end of the meeting,” said another official.

The declaration is expected to relate to critical issues including special and differential treatment for developing nations.

Paytm president Bhushan Patil quits

Bhushan Patil, president at Paytm, has quit the company, two people directly aware of the matter said. Patil, who joined Paytm after a five year stint with Alibaba, had initially joined the Noida-based company to look after its cross border commerce business. Patil's exit marks one of the most senior leaders leaving the company in recent times.

With Paytm focusing on its domestic commerce business, he was one of the key executives for Paytm Mall. Patil joined Paytm in March 2016.

It is not yet clear as to what's Patil's next move after Paytm. He was one of the higher ranked executives in Paytm. 

An email sent to Paytm did not immediately elicit any response on the matter. 

The development comes at a time when Paytm’s commerce business is under pressure from bigger rivals like Amazon and Flipkart (now owned by Walmart). 

TOI previously reported saying how Paytm Mall has been trying to focus on its wholesale commerce business. In March TOI reported, Paytm and Paytm Mall, together could raise anywhere between $1-2 billion from investors. American e-tailer eBay is looking to invest in Paytm Mall as well. 

With Patil's departure, the remaining team of Paytm Mall in Bengaluru will move to Noida. This would mean, largely the travel business and wealth management bsuienss--Paytm Money-- would be housed in Bengaluru.

Shopaholics Virat and Anushka turn brand ambassadors for Myntra

Star couple Virat Kohli and Anushka Sharma have been roped in as the first official brand ambassadors of Flipkart-owned ecommerce platform, Myntra.

Its campaign 'Go Myntra-la-la' brings alive the joyful experience of shopping and kicks-off with an ad film starring the star couple, read a statement.

Virat and Anushka share a lot of common passions, and shopping is one of them.

Amar Nagaram, Head at Myntra-Jabong, said: "The association of Bollywood and sports with fashion needs no introduction and hence having Virat and Anushka as the face of this new campaign will enable us to build strong brand salience and establish the joy and convenience of shopping on Myntra."

The musical film opens with viewers witnessing Anushka pushing a shopping cart with Virat sitting in it. It then goes to Anushka, walking in style as she comes next to a fashion billboard, she whips out her smart phone and taps the brand icon and scans the floral dress on the billboard.

The app throws up the same dress, ready to be shopped.

In the film, however, the editor takes us straight to Anushka continuing her walk with the new dress. It then cuts to Virat browsing through various sneaker options to choose from before he settles on his perfect pair.

The film goes back to the couple enjoying a moment of fun with a shopping cart.

The couple, fondly called Virushka, have endorsed brands like Head and Shoulders and Manyavar.