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Amazon has written to the Securities and Exchange Board of India (SEBI) to take “urgent action” to halt the shareholders’ meeting convened by Future Retail Ltd (FRL) on November 10 to seek approval for the sale of assets to Reliance Industries for ₹24,731 crore.
In its letter to the SEBI chairman Ajay Tyagi, Amazon has said that the market regulator should compel FRL to comply with the orders passed by multiple courts that have stayed all proceedings related to the Future Retail deal.
Amazon has added that SEBI should direct FRL to “withdraw the notices for convening the meeting of shareholders and creditors of FRL, and intimate such shareholders and creditors of the cancellation of such meetings as the continuation of the notices creates a false market in FRL securities and misleads the stakeholders.”
Earlier this month, BusinessLine had reported that at least six Future Group companies have informed SEBI that they are convening meetings with their equity shareholders on November 10 to seek approval for the merger of assets with Reliance Retail.
Amazon has cited an order given by the Emergency Arbitrator (EA Award) on October 25, 2020 which stated that “the Respondents (Future) are injuncted from taking any steps in furtherance or in aid of the board resolution made by the Board of Directors of FRL on August 29, 2019 in relation to the disputed transaction (the Reliance deal), including, but not limited to, filing or pursuing any application before any person, including regulatory bodies or agencies in India, or requesting for approval at any company meeting.”
FRL appeal rejected
Future Retail had filed an appeal in the Delhi High Court for grant of ad-interim relief, seeking permission to conduct the meetings of its shareholders and creditors for the approval of the Reliance deal, but this was rejected by the court.
“It is relevant to note that the illegal characterisation and classification of the EA Award and the injunction granted against FRL have been repeatedly found to be bad in law by the Supreme Court of India, the Delhi High Court and the Arbitral Tribunal,” Amazon said.
This comes even as Amazon has filed a petition in the Supreme Court questioning the ₹24,000-crore merger deal. The matter is listed for November 11.
According to K Narasimhan, Senior advocate Chennai High Court, “FRL’s approach seems to be a blatant disregard of the judiciary and the verdicts of SIAC and the High Court of Delhi. Only time will tell if this manoeuvre results in personal perjury of FRL over non-compliance of these directives.”
After facing acute cash crunch post-Covid last year, the Kishore Biyani-owned Future Retail decided to sell its assets to Reliance Retail. The sale included the acquisition of the retail, wholesale, and logistics and warehousing business of Future Group for ₹24,731 crore.
This deal was contested by Amazon, which invested ₹1,400 crore in Future Retail’s sister concern Future Coupons Private Ltd. In October, the American e-commerce giant dragged the retail chain into arbitration at Singapore.
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