SUMMARY
Attended by Future Group’s Kishore Biyani, Amazon’s legal head Rakesh Bakshi, among others, the inconclusive settlement meeting happened a month ago
Future Group declined the pre-conditions for a settlement process without first seeing a definitive agreement
Future’s independent directors have written two applications to CCI alleging misrepresentation on behalf of Amazon to invest in Future Retail via Future Coupons
With the growing feud between Amazon and Future Group, now, the ecommerce behemoth has reportedly asked Future Group to withdraw its applications made against it to CCI. According to a report, the withdrawal was a prelude to an out-of-the-court settlement, where Amazon has also asked for generous compensation against its objections to the deal with Reliance Retail.
The meeting happened a month ago, and was attended by Future Group’s Kishore Biyani, Amazon’s legal head Rakesh Bakshi, among others. However, the outcome was inconclusive. Future Group declined the pre-conditions for a settlement process without seeing a definitive agreement, the report cited.
The move has been reported to have happened before Future Retail Ltd’s (FRL) Independent Directors wrote letters to the CCI disclosing an email trail citing Amazon always wanted to invest in FRL, but couldn’t, due to FDI restrictions on retail entities.
The email between Rakesh Bakshi and Jeff Bezos revealed the startling details on how Amazon viewed and planned to enforce its agreements, the letter claimed. FRL’s independent directors alleged that Bakshi’s email stated that due to foreign investment policy restrictions, Amazon will use a “twin-entity investment” structure to invest in FCPL — simultaneously acquiring a stake in FRL.
The directors stated in the letter that Amazon “concealed facts, made misrepresentations to the CCI to seek approval for its investment in Future Coupons, a promoter holding company.” They accused Amazon of flouting India’s FDI and FEMA rules.
In September 2019, Amazon informed the CCI that it had proposed to acquire 49% stakes in Future Coupons. The deal had reportedly also mentioned a list of 30 entities with whom the Future Coupons could not transact, including Reliance Retail, a subsidiary of Reliance Industries Limited.
The restraint was on Future Coupons which owns 7.3% shares in Future Retail. Through this transaction, Amazon had also managed to acquire around a 3.58% stake in Future Retail — the business that is set to be acquired by Reliance Retail.
Following the deal announcement between FRL and Reliance Retail, began an intensive battle between Future Group and Amazon. Escalating the matter from the SIAC to Delhi HC, now, a decision by the Supreme Court is pending over a petition filed by the US-based ecommerce major.
Aiming to bolster their case against Amazon, FRL seeks to revoke the 2019 deal between the US ecommerce major and Future Coupons. This will eventually lead to making void Amazon’s case against Future Group.
Not only will it result in the cancellation of CCI approvals given for Amazon’s all transactions with Future Group, but it will also commensurate fines and penalties by ED and other enforcement bodies.
