Companies

Amazon-Future tussle intensifies

Our Bureau | | | Updated on: Nov 28, 2021
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Amazon says CCI nod for Future-Reliance deal ‘illegal’, while Future claims Amazon showed contempt towards the statutory authority

The war of letters between Amazon and Future Retail continued on Sunday. While Amazon has written to the Competition Commission of India that its approval of the deal between Future Retail and Reliance Industries was illegal, Future Retail has said Amazon showed outright contempt for an Indian statutory authority by walking out of a hearing with the competition authority last week.

ED summons Amazon head

Meanwhile, the Enforcement Directorate has summoned Amazon India chief, Amit Agarwal, as part of an investigation into the alleged irregularities in a deal done by the American e-commerce giant with Future Group in 2019. An Amazon spokesperson said: “We are in receipt of summons issued by the ED in connection with the Future Group. As we have just received the summons, we are examining it and will respond within the given time frame.”

The ED is examining a deal that was struck between a Future Group company, Future Coupons Pvt Ltd (FCPL), for over ₹1,431 crore, in 2019. The ED is looking into whether Amazon violated India’s Foreign Exchange Management Act (FEMA).

Deal in 2019

The 2019 deal is central to the ongoing dispute between Amazon and Future group. If the 2019 deal itself is revoked, then Future could push through with its deal with Reliance Industries. In this context, the CCI had called a meeting on November 24 to hear both Amazon and Future. But, according to Future Retail, Amazon showed contempt for an Indian statutory authority by walking out of the hearing.

“The conduct of Amazon smacks of arrogance. It has shown scant respect to the Delhi High Court, the Supreme Court and to this commission. It could have moved the Delhi High Court for an extension of time or for a suspension of the order, but it perhaps did not find it necessary to do so.... When it failed to get relief from the Supreme Court, it then sought an adjournment from the CCI, and when that was refused, in a display of outright contempt for an Indian statutory authority, this trillion-dollar American company walked out of the hearing,” said Future group through its legal counsel, Aggarwal Law Associates, in a letter to the CCI.

Earlier this month, Future Retail’s independent directors had written to the CCI to cancel the approval for the 2019 deal between Amazon and Future Coupons on the grounds that Amazon had “concealed facts” at the time of seeking approval for its investment.

On its part, Amazon has used this 2019 deal to obtain orders from various courts. Under the 2019 deal Future could not sell stake to Reliance Industry. Last year, Amazon dragged Future Retail and FCPL to the courts over a deal that Future Retail had struck with Reliance Industries in 2020 for ₹24,713 crore. Amazon claimed that Future Retail, a sister concern of FCPL, was in violation of an agreement signed in 2019.

Amazon has said that the approval given by the Competition Commission of India (CCI) for the slump sale of assets of Future Retail to Reliance Retail is “illegally obtained” and is “a nullity in the eyes of law”.

In a letter to CCI, Amazon said that the Emergency Arbitrator (EA) in Singapore International Arbitration Centre has restrained Future Retail (FRL), Future Coupons (FCPL), and the Biryanis from taking any steps in relation to move ahead with the deal with RIL.

“Therefore, considering the above, we request you to act in aid of the binding injunctions operating against FRL, FCPL and the Biyanis, in terms of the EA Order and the Order on Vacate Application and recall the CCI Approval for the Impugned Transaction forthwith. We are also requesting for a personal hearing to apprise the Hon’ble Commission of these material factual developments, which demonstrate that the CCI Approval for the Impugned Transaction is a nullity in the eyes of law,” said Amazon in its letter to CCI

Published on November 28, 2021

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