An association representing over 2,000 sellers on various e-commerce platforms has formally complained to the Reserve Bank of India (RBI) over alleged non-payment of dues by Chinese e-tailer Club Factory.
The All India Online Vendors Association (AIOVA), in the complaint dated August 10, said Club Factory had violated Section 28 of the Payments and Settlements Act, 2007 by withholding payments to sellers for more than a month, even after products were shipped to consumers.
ET has reviewed a copy of the letter.
The move comes nearly a month after Club Factory suspended services in India after its app — as well as 58 other Chinese apps — were banned over privacy and security concerns.
At the time, the company had informed sellers that it was putting “on hold” settlement of all unpaid dues till the government revoked the ban.
“Thousands of small sellers whose dues are in lakhs of rupees (are) pending to be cleared. The total dues amount to crores of rupees,” AIOVA said in its complaint. “…if Club Factory is allowed to withdraw money from this escrow account, small sellers and their families will be put to irreparable loss.”
Club Factory did not respond to ET’s queries seeking comment till press time Thursday.
A person in the know of the matter said Club Factory owed around Rs 60 crore to sellers and nearly Rs 100 crore to its logistics partners.
ET was not able to independently ascertain the exact amount of unpaid dues.
In its complaint, AIOVA also said Club Factory had withdrawn money from the escrow bank account designated for merchant dues and asked the regulator to seize all of its bank accounts.
ET reported on July 10 that Club Factory had continued operating in India even after the government banned its services.
The Chinese company has had a chequered history with authorities, after Customs earlier found it was mis-declaring the value of imported goods.
Leave a Reply