Flipkart India Pvt Ltd said the Karnataka High Court has stayed insolvency proceedings against Walmart-owned Flipkart in the National Company Law Tribunal (NCLT) that was initiated by a supplier.
CloudWalker Streaming Technologies Pvt Ltd, a Mumbai-based supplier of LED televisions, had filed the insolvency plea to recover ₹27 crore from Flipkart.The stay is important for Flipkart as the NCLT order, a copy of which has been reviewed by Mint, would have severely hit its business in India.
A Flipkart spokesperson, in an email response, said “Karnataka High Court has stayed the order of the NCLT in favour of Flipkart. This is an ongoing commercial litigation which we are challenging.“
Flipkart India, the business-to-business commerce entity of Flipkart, supplies products to various third-party sellers who then sell to shoppers through Flipkart’s app and website. Flipkart and other e-commerce firms have adopted such convoluted structures in order to get around foreign investment laws, which ban direct online retailing by a foreign firm.