SUMMARY
SEBI has appointed a forensic auditor Chokshi & Chokshi LLP to check financial statements and books of account of Future Retail Limited
In a letter to stock exchange, Future Consumer informed that SEBI’s forensic auditor will look into auditing books of FRL and other entities for the period of FY 2020-21 and FY 2021-22
SEBI informed, “The audit of the company (FRL) will be with respect to related-party transactions with FRL’s only”
Stock exchange regulatory body, SEBI has appointed a forensic auditor Chokshi & Chokshi LLP to check financial statements and books of account of Future Group’s retail arm Future Retail Limited (FRL).
In a letter to the stock exchange, Future Consumer Ltd (FCL) informed that SEBI’s forensic auditor will look into the auditing books of FRL and other entities for the period of FY 2020-21 and FY 2021-22.
SEBI informed, “The audit of the company (FRL) will be with respect to related-party transactions with FRL’s only.”
The regulatory body further informed that it has reasonable grounds to believe that the disclosure of financial information and the business transactions by FRL have been dealt in a manner that may be detrimental to the interest of investors or securities markets or a person associated with the securities market. The FRL may also have violated Sebi’s Securities Contract Regulations Act, or other regulations issued by it.
Earlier, FRL’s stakeholders and proxy advisory firm InGovern Research Services had reportedly approached SEBI, urging it to take an action to protect the interest of FRL’s stakeholders and preserve it from getting insolvent in court.
These developments have come at a time when Future Group is already in a two-year-long spat with the ecommerce giant, Amazon over the Future-Reliance Industries (RIL) deal.
Earlier, Future Group approached Singapore International Arbitration Centre (SIAC) to challenge Amazon’s arbitration proceeding over the Future-RIL’s defunct deal. However, SIAC denied Future Group’s plea and also, announced that it would continue its proceeding in the case initiated by the ecommerce giant.
In its petition, Future Group said that the Amazon-Future deal has been called illegal by the regulatory body, Competition Commission of India and therefore, argued against proceeding in SIAC trial.
The whole legal battle between Amazon and Future Group dates back to August 2020 when Future Group was selling its retail assets worth INR 24,713 Cr to RIL. Nonetheless, Amazon objected to this and claimed to be an indirect stakeholder in Future Retail thus, prohibiting the transaction between RIL and Future Group.
