The National Company Law Tribunal (NCLT) on Monday allowed Future Retail Ltd (FRL) to convene meetings of its shareholders and creditors to approve the sale of its retail assets to Reliance Retail.
The approval comes exactly a year after FRL approached the NCLT in Mumbai seeking permission to hold these meetings to approve the Rs 24,000 crore transaction.
Amazon has objected to the deal and the two parties have been slugging it out in various tribunals and courts in India as well as at an arbitration centre in Singapore since October 2020.
FRL lawyers have pleaded in the Supreme Court and the Delhi High Court that the company be allowed to complete the 15 step process required for the deal to go through. The NCLT clearance marks the ninth step in the overall procedure, lawyers said.
“ Now the meetings of the shareholders and creditors will happen. The chairperson of the meetings will file reports of the meetings to the NCLT. At a later stage, a petition will be filed for sanctioning the scheme,” said Hemant Sethi, FRL’s lawyer in NCLT.
FRL intimated the stock exchanges about the NCLT’s Monday order.
“The written copy of the said order is awaited. The schedule of the meetings of shareholders and Creditors will be intimated in due course of time,” the filing to the NSE and BSE said.
Amazon did not respond to an email seeking comment.
Meanwhile, the National Company Law Appellate Tribunal (NCLAT) on Monday said it will continue hearing on Wednesday an Amazon petition challenging the Competition Commission of India’s (CCI) order suspending Amazon’s 2019 investment in a Future Group promoter firm. This investment forms the basis on which Amazon is objecting to the FRL- Reliance deal.
Last week, the Supreme Court had fast-tracked the proceedings in the NCLAT and had said the apex court will hear cases pertaining to the dispute between Amazon and Future Group after the NCLAT decides on the US ecommerce giant’s petition challenging the CCI order.
Both Amazon and Future Group have filed more than two-dozen cases and counter-cases in various courts and tribunals after Amazon secured a stay on the proposed sell-off of Future Group’s assets to Reliance Retail from an emergency arbitrator of the Singapore International Arbitration Centre (SIAC) in October 2020.
Amazon has objected to the Reliance-Future deal accusing the latter of breaching a 2019 investment contract with FRL’s promoter firm Future Coupons Pvt. Ltd (FCPL). Amazon argues as per agreements signed as part of the Rs 1,431 crore capital infusion into FCPL in 2019, FRL must seek consent from Amazon before selling its assets. Furthermore, Amazon said that as per their agreement, FRL had agreed not to sell its assets to more than a dozen parties including Reliance.
At present, various cases are simultaneously being heard in the Supreme Court and the Delhi High Court. On Monday, the Delhi High Court said it will continue hearing a case on Thursday after a more than two-hour long submission by FRL’s lawyer Harish Salve.
Justice C Hari Shankar of the Delhi High Court is hearing a combination of cases afresh after the Supreme Court set aside two previous verdicts by separate judges of the Delhi High Court and asked the high court to hear the dispute again on merit.
