Rashi-NECTA War Upsets North-East Partners

IT associations never
cease to amaze channel partners and vendors often taking up disputed
cases and offering amicable solutions which are beneficial to both
the parties. However, as an extreme move, associations resort to ban
or boycott vendors or distributors in case of severe disagreement.
This was exactly the case which recently took place in eastern part
of India when Guwahati based North East Computer Trader's
Association (NECTA) banned href="http://www.dqweek.com/NECTA-issues-7-day-ultimatum-to-Rashi-Peripherals">Rashi
Peripherals (RP) alleging business
malpractices and violation of ethics.

The dispute arose over the
nature of business as well as shareholding of Savera Marketing Agency
(SMA) which, according to RP, is operational for the last 10 years.
Channel partners in Guwahati alleged that the directorship of RP and
SMA is disputed as RP has a direct 'vested interest in SMA' and
the retail partner (SMA) is getting 'undue privileges from RP as
well as some other vendors'.

“Gopal Pansari of Rashi
Peripherals has a shareholding in SMA whereas he is also the RM, east
of RP which implies that he
has a direct stake-holding and interest in the business performance
of SMA. We thereby question Rashi to clarify themselves to us as to
whether they are distributors or retailers,” said Ranjan Kumar Das,
head, legal, NECTA. Tracing back the dispute back in November, NECTA
sent a mail to Rajesh Goenka, VP, sales and marketing, RP on November
2 to clarify its stand and explain whether RP is a retailer or a
distributor.

Although reply from RP
officials came in the same day with the distributor clarifying, “RP's
directors are KK Choudhary and Suresh Pansari and SMA's directors
are Vijay Kumar Pansari and his family including Gopal Pansari which
is not managed by Rashi but by an independent management team from
SMA.” NECTA rejected the reply stating, “totally incomplete and
it has well established our main concern/points (regarding SMA and
dubious nature of the distributor) are correct.” Besides, alleging
that RP is preferring SMA in its dealings, NECTA also alleged that RP
is, “involved into direct billing to the end-user in spite of
having stock with other dealers.” Further, NECTA alleged that
Rajesh Agarwal, head-Guwahati branch, RP had stated to NECTA that he
was authorized by RP to represent both SMA as well as RP in all
business dealings and Gopal Pansari, being an RP official called up
NECTA office bearers to give NECTA membership to SMA. “We have
evidence that Gopal Pansari closed one deal on behalf of SMA despite
being an RP official. We thereby ask them (RP) to prove that his
hands are clean and is in no way related to SMA,” claimed Jalan.
Although several other allegations related to supply routing and
sales enquiries dotted the charts, the primary concern for NECTA was
related to the alleged dubious nature of business conducted by RP.
Besides, NECTA also alleged that there is 'constant information
flow' between RP and SMA related to vendors, databases and stocks.
In a mail sent to RP by NECTA, the association alleged whenever there
is likely to be shortage of particular product, entire stock is
transferred to SMA and later on, the channel partners are asked to
contact SMA by RP for getting the stocks. “Whenever any enduser or
corporate enquiry is received by Rashi through their vendors or other
sources, it is transferred to SMA. We have even tested this through
dummy enquiry. Recently, one of our channel partners placed an order
to RP for few Asus laptops along with a blank cheque. When he
received the material, he was surprised to note the billing had been
done by SMA instead of RP. What does this prove?” alleged Avinash
Jalan, assistant general secretary, NECTA.

However, Krishna
Choudhary, director, RP, too, alleged, “NECTA committee members
came at the CBF venue at Hotel Kiran
Shree and gathered to stop members and other industry business
community from attending the program.” “In fact our senior team
members went to request NECTA committee members to convince and
request for joining the program. Also, NECTA should have heard RP
before giving boycott SMS on November 11, 2011, the date of CBF VII
in Guwahati. We are always open for mutual discussion and it would
have been good to give us appropriate discussion platform,”
Choudhary stated in response to some queries by the association.

RP has owned up to 2
allegations, viz, the flow of information between SMA and RP and
end-user billing with assurances of not repeating the same again. “We
have already sent a mail on December 3 stating that we will not
further do direct billing to the end-user in any way and would ensure
that the flow of information between RP and SMA is contained. We have
enforced an escalation matrix in RP whereby we can address any
channel grievance in a schematic manner,” said Goenka. Further, RP
claimed that it is always open to any verbal discussion with NECTA to
solve the matter amicably and end the dispute. With the deadlock
prevailing and the aggrieved parties unable to come to any
conclusion, Kolkata based IT trade body, COMPASS is likely to play
the role of a mediator. Although information related to COMPASS'
role remains classified, it is likely that COMPASS may solve the
dispute in a very short timeframe with its officials stating that it
will be easy in convincing NECTA members about the ongoing ban.
However, what evolves from the dispute is another instance of a
confederation remaining silent over regional issues as the case,
according to NECTA and COMPASS, was never referred to Confederation
of IT Associations (CITA). CITA witnessed a silent stance throughout
the saga as 'officially' the dispute was never referred to it.

According to RP, in its
dealings with NECTA (related to the dispute), the distributor kept
the COMPASS president in loop and NECTA did vice-versa. The stance
became unclear furthermore as B Hari is the president of both COMPASS
as well as CITA and doubts prevail among the associations as well as
the channel community as to under what capacity Hari is likely to
intervene in the resolution. As of now, the eastern market remains as
cloudy as it was before the formation of CITA despite the hoopla
created around unity of the associations and a 'more powerful'
trade confederation with RP going on incurring revenue losses in the
North East.