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Follow UsAddressing the ongoing implicit proscription on Rashi Peripherals (RP) and Savera Marketing Agency (SMA) from member associations of Confederation of Indian IT Associations (CIITA), the latest meeting of the 3 parties yet again proved futile with no compromise or resolution being reached upon from any of the parties involved; the result being CIITA continuing with its "refrain" policy.
In the last meeting held on October 14 in Kolkata between RP officials and CIITA, the later clarified its stance over "ethical trading" after rejecting the resolution offered by RP.
According to sources in CIITA, RP offered to stop any internal billing to SMA as a resolution to the problem which CIITA rejected owing to the problem of the shareholding pattern of SMA and RP's interest in SMA still left unaddressed.
"This has compelled partners to believe that related party transactions and instances of data sharing cannot be ruled out in the present and the near future", CIITA advocated after the meeting.
According to CIITA officials, Gopal Pansari is an RP official who is also the promoter of SMA. Owing to the complexity of the shareholding pattern and the interest of the promoter involved, CIITA stated that the solution from RP does not effectively address its main concern.
A similar situation also occurred long time back in Assam when a proposal from RP of the same stature was rejected by North East Computer Traders Association (NECTA).
"Confidential data leakages from RP is one of the most crucial elements in this case, but then, we believe that RP and SMA are same entities which clearly violates the ND policy we had adopted", said Navin Gupta, spokesperson, CIITA.
According to the ND policy, any business entity in channels can operate in any of the channel tiers directly implying that a distributor can unswervingly enter the retail segment and vice-versa but under the same banner (company name). Sister concerns are not allowed under the ND policy.
As CIITA recognises SMA to be a "part or a business unit of RP", the confederation treats it as a violation of the ND policy.
In its latest statement issued after October 14, CIITA has directed all member associations that members "must refrain" from carrying on any transactions with RP and SMA since a workable solution suited to all parties could not be concluded.
"As of now after the stand taken by CIITA asking members to refrain from business deals with RP and SMA, we have received a good response as nearly all billings to and from SMA and RP have stopped in major eastern locations", Gupta added.
When asked about the business hurdles channel partners might incur as a result of the "refrain policy", Gupta responded, "We'll source the materials (stocks or inventory) from other means or other distributors. Also the vendors need to think how they will supply to the market demands. Thus, I don't think there will be any major problem related to the supply chain just because we are ceasing activities with a distributor and a sub-distributor. As of now, we staunchly stand by our motive and continue to support CIITA's cause".
Clearly, applying the pressure on RP and SMA, CIITA has put the ball into the vendor's court stating it is "upto them" to decide how they (vendors) will ensure smooth supply under the condition of the ongoing interdiction on RP.
Under the ongoing directive from CIITA, RP is losing atleast 10% of its aggregate business (YoY basis) across West Bengal, North-East India, Sikkim, Odisha, Jharkhand and Bihar.