Amazon has warned Future Retail Ltd (FRL) against holding meetings of its shareholders and creditors next week to approve the sale of its retail assets to billionaire Mukesh Ambani’s Reliance Retail.
In a 16-page letter to Kishore Biyani and other promoters on April 12, the US e-commerce giant said such meetings are illegal and would not only breach 2019 agreements when Amazon made investments into FRL’s promoter firm but also violate a Singapore arbitral tribunal’s injunction on the sale of retail assets to Reliance.
Future Group companies will convene meetings of shareholders and creditors on 20 April and 21 April to get their approval for ₹24,713 crore deal with Reliance.
The move comes after National Company Law Tribunal (NCLT) had allowed the group companies to conduct the meetings of its shareholders and creditors seeking their approval for the composite scheme of arrangement between Future and Reliance.
The tribunal had also rejected the plea of e-commerce major Amazon, which is contesting Future Group’s deal with Reliance Retail, part of oil-to-telecom conglomerate Reliance Industries.
The ongoing legal tussle between Future Group and Amazon is over the sale of Future’s retail assets to Mukesh Ambani-led Reliance Industries Ltd.
The letter signed by a representative of Amazon.com NV Investment Holdings LLC asked the Biyani group to strictly abide by the injunctions granted by the Emergency Arbitrator and “ensure that no further steps are taken to proceed” with the transaction.
“Any attempt to defeat the injunctions and seek to vote on the basis of forged documents, in light of Amazon’s categorical denial that it has not given its consent to either the directors of Future Coupons Pvt Ltd (FCPL) or any representatives of FCPL or the promoters would amount to taking cognizance of a forged document with the intent to deceive and cheat, which would render all parties, whether acting directly or abetting such act liable to actions in accordance with law,” it said.
Amazon is opposed to Reliance’s August 2020 offer to buy Future Retail’s stores and warehouses for ₹24,713 crore on grounds that the deal violated its 2019 agreement through which it acquired a 49 per cent stake in FCPL, the promoter entity of Future Retail, for about ₹1,500 crore.
It has dragged Future to arbitration and in courts to block the Reliance deal.
Reliance in late February quietly began taking over the rental leases of hundreds of stores once run by Future Retail and Future Lifestyle Fashions Ltd amid lawsuits and arbitration across India and Singapore.
“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,” Amazon wrote.
Recently, Future Retail accused Reliance Industries of forcefully taking over stores and asserted that it did not handover any of the retail units to the oil-to-telecom conglomerate.
Future – which has more than 1,700 outlets, including popular Big Bazaar stores – has been unable to make lease payments for a bulk of its outlets.
With landlords insisting on payments or shutting down of stores, Reliance transferred the leases of some stores to its name and sublet them to Future to operate the stores. It also offered all the 30,000 employees of Future Retail jobs.
In addition, a majority of inventory at these stores was being supplied by Reliance JioMart as a cash-strapped FRL could not clear dues to existing suppliers.
Source: Mint