Amazon has written to the Securities and Exchange Board of India, requesting the regulator to investigate Future Retail Ltd (FRL) for what it alleged “material suppression” and “false disclosures” by the Indian retailer, “defrauding its shareholders and the Indian investors at large”.
Amazon had challenged the deal to sell FRL assets to Reliance Industries’ retail venture. The deal had fallen through after a majority of FRL’s secured creditors voted against it. Prior to that, a Reliance unit had taken possession of hundreds of properties where FRL had operated its stores, citing non-payment of rent for the sites it had subleased to the retailer.
Amazon has also approached court, accusing FRL of alienating its retail assets in favour of Reliance.
In its letter to Sebi, dated May 2, Amazon said FRL did not “face a significant liquidity risk with regards to its lease liabilities, as the current assets are sufficient to meet obligations to lease liabilities as and when they fall due”.
Contrary to the statement made by FRL in its annual report for 2020-21, it made a “false statement” in a February 26 disclosure, claiming for the first time that it had a “huge outstanding” in relation to payments for access to store premises, Amazon alleged.
“FRL’s conduct is in gross violation of the Sebi (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“LODR Regulations”) and Sebi (Prohibition of Fraudulent and Unfair Trade Practices relating to Securities Market) Regulations, 2003 (“PFUTP Regulations”) and Sebi is obligated to protect the interest of investors in securities and to regulate the securities market,” Amazon wrote to the regulator.
