CMDA sends legal notice to Samsung over gray market issue

Amrita Tejasvi

New Delhi

July 23rd, 2007

In response to the circulation sent by Samsung to the channel partners across
the country on the issue of gray market, the Computer Media Dealer Association (CMDA)
has sent a legal notice to the company stating that the company needs to
withdraw the alert notice. CMDA informed that if the circular is not withdrawn
within two weeks of forwarding the notice they might initiate proceedings
against Samsung in court.

Around two months back, Samsung had taken an initiative to sensitize the
partners across the country on the issue of gray market import and had alerted
them about the threats it poses to the business. The company had also mentioned
in its circulation about the illegality involved with gray-market products and
clarified that it might initiate action against the dealer or its company under
the laws of the land.

CMDA has stated in the notice that they would take actions against the
company for the losses suffered by them as a consequence of the aforesaid
'Educational Alert initiative regarding Samsung gray market products.' "We
have forwarded the notice to Samsung and if they disagree to our point then they
will have to prove the basis on which it terms import of genuine products as
gray market. None of our members are in favor of unauthorized business but one
cannot blindly follow the monopolistic trade practices," said Manoj Khanna,
Secretary, CMDA.

Reacting to the legal notice sent by CMDA, Samsung commented that it would be
shortly responding to the notice and all the claims in the notice are baseless
and without any merit. According to Zutshi, Dy MD, Samsung India," It is a
myth and a wrong perception that by merely paying applicable custom duties and
complying with the import formalities, all products entering into the Indian
territory automatically become compliant with all product and IPR related laws
and regulations of India."

Zutshi confirmed that there is no plan to withdraw the educational letter as
it is in the larger interest of the consumers and the dealers only and Samsung
will continue its efforts to educate the channel community to protect its
customers and maintain quality and standards of the products.

Briefing on the steps taken by Progressive Channel Association of Information
Technology (PCAIT) with regard to the Samsung's notice, Saket Kapur, Secretary,
PCAIT highlighted that their association is not in the mood to take aggressive
action against Samsung as it won't resolve the matter. "We want to bring
out a feasible solution for this issue for which we have been interacting with
Samsung and very soon we would have a meeting with the company. We want to sit
and talk and then reach a solution instead of dragging the case that hampers the
business of partners," commented Kapur.

COMPASS, an association in Kolkata, clarified that it had regular meetings
with Samsung after the alert message was circulated and the matter is closed
now, however the debate whether the parallel import is a legal or illegal trade
practice still continues to be there.

Chetan Shah, General Secretary of Mumbai based association TAIT, informed
that they are soon going to have a meeting among the members and then would come
forward with their stand on the issue.