SUMMARY
Amazon said that such meetings were illegal and would violate a host of agreements including SIAC’s injunction on the sale of assets
In a letter sent by Amazon to Kishore Biyani and other promoters on April 12, the ecommerce giant said that such meetings were illegal
Future Group will convene a shareholders’ meet on April 20 and 21 to seek approval for the INR 24,500 Cr sale to RIL.
Against the backdrop of the ongoing tussle over Future Retail, ecommerce giant Amazon has fired a fresh salvo against the retail giant.
The US-based ecommerce player has warned Future Retail Ltd (FRL) against holding meetings of its shareholders scheduled next week to approve the sale of its assets to Mukesh Ambani-led Reliance Retail.
The veiled threats came in a letter that Amazon shot off to Kishore Biyani and other promoters on April 12. In the letter, seen by LiveMint, Amazon said that such meetings were illegal and would violate a host of agreements including Singapore International Arbitration Centre’s injunction on the sale of assets and a 2019 agreement that was signed when Amazon invested in FRL’s promoter firm.
The letter stated, “It is reiterated that any actions of voting in favour of the scheme or any steps in furtherance of or in aid of the scheme without Amazon’s consent by any director, authorised representative, proxies or agent on behalf of the promoters, promoter entities or FCPL would be considered an express violation committed by the Promoters and FCPL of valid and binding injunctions operating against them.”.
This comes on the back of a scheduled meeting of Future Group’s shareholders on April 20 and 21 where it would seek approval for the INR 24,500 Cr sale to RIL. The escalation comes a month after NCLT gave its nod to Future Group to convene the meeting of its shareholders seeking approval for the mega deal with RIL.
This adds to the ongoing saga between Future Retail and Amazon. The two sides have been warring on a slew of issues and have dragged the matter to a host of adjudicating bodies across borders. While some matters have gone in favour of Amazon, others have seen authorities siding with FRL and Reliance.
Barely a week ago, the Supreme Court, in a major blow to FRL, had also ordered the resumption of trial before the SIAC. The two sides are locked in a legal tussle over the merger of FRL with Reliance Retail.
Rife With Controversy
At the heart of the dispute is the INR 24,713 Cr sale of Future Group’s retail assets to the RIL that was announced in August of 2020. Amazon claims that due to its indirect stake in Future Retail (via its 49% shareholding in sister company Future Coupons), Future Group is prohibited from carrying out a transaction with Reliance.
After reports emerged of RIL’s takeover back in late February, Amazon had proposed one-on-one talks with Future Group to resolve the standoff. Interestingly, the talks collapsed on March 15, with the ecommerce giant launching an open attack against the Indian companies.
Adding to the issue is the public confrontation between Reliance and Amazon. Late last month, the US-based ecommerce platform had taken out large ads in many Indian dailies accusing both FRL and RIL of indulging in fraudulent practices.
This came after Reliance, in February, quietly started taking over the rental leases of stores run by Future Group. Later, the beleaguered retail giant accused RIL of forcefully taking over its stores. Future Group’s prized possession includes more than 1,700 outlets, including the popular Big Bazaar stores.
Earlier this month, reports also stated that US ecommerce major had also accused FRL of allegedly pursuing an ‘elaborate and orchestrated fraud’ to secure a favourable verdict in the courts.
Hitting back, FRL had also recently alleged that Amazon had successfully destroyed an INR 26,000 Cr company. The company had also informed the Apex Court, earlier this month, that it was barely ‘hanging by a thread’, adding that its bank accounts were frozen and was even unable to pay rent.
The Kishore Biyani-led company is currently saddled with a debt of more than INR 10,000 Cr including short-term and long-term loans. The merger is seen by the company as a way out of the financial mess.
