Amazon plans to prove that the Reliance-Future deal would also be in equal contravention of foreign investment rules in the country if it happens.
The CCI had suspended the earlier deal between Amazon and Future Coupons and imposed a fine on the former.
Earlier this week, Amazon had filed an appeal against the CCI’s suspension decision and also made an SC appeal challenging Delhi High Court’s decision to suspend arbitration proceedings.
Amazon will counter Future Group’s assertion that it can only choose Reliance Industries (RIL) as an acquirer instead of the American giant due to the extant foreign investment regulations in the country, according to media reports.
According to anonymous sources who spoke to Mint, Amazon plans to show that the Reliance-Future deal already involves foreign money because overseas investors hold a substantial stake in RIL.
“If RIL can bring in money, Amazon can bring in more for Future Group if needed. The structure proposed by RIL can be easily created with another player to help Future with enough capital. Samara Capital’s name was proposed for this purpose only but Future had denied it,” one of the sources told the publication.
Earlier this week, Amazon had filed an appeal against the CCI’s (Competition Commission of India) suspension decision at India’s National Company Law Appellate Tribunal, according to Reuters. It also reportedly made an appeal at the Supreme Court challenging Delhi High Court’s decision to suspend arbitration proceedings.
The National Company Law Appellate Tribunal (NCLAT) then issued notices over these petitions filed by Amazon.
Last month, the CCI had temporarily suspended a 2019 Amazon-Future Coupons deal where Amazon had bought a 49% stake in Future Coupons, thereby getting an indirect stake in Future Retail.
The American multinational had used this deal as a claim to block a $3.4 Bn acquisition proceedings between Future Retail and Reliance.
Along with temporarily suspending the deal, the CCI had also imposed an INR 200 Cr fine on Amazon. It mentioned reasons including a deliberate attempt to suppress the actual scope and purpose of its 2019 acquisition. It said Amazon provided false or incorrect representations to conceal material facts.
“As regards the failure to notify combination in terms of the obligation cast under Section 6(2) of the Act, Section 43A of the Act enables the Commission to impose a penalty, which may extend to one per cent of the total turnover or the assets, whichever is higher, of such a combination. Accordingly, for the above-mentioned reasons, the Commission hereby imposes a penalty of INR Two Hundred Crore upon Amazon.” said the commission.
Our staff writers have prepared a comprehensive guide that explains all the major corporate disputes that happened in the Indian startup ecosystem over the last year, including the Amazon-Future case. You can read it here to know more about the ongoing tussle between the two giants.
