Companies

Amazon writes to SEBI to revoke approval for Future-Reliance deal

Forum Gandhi Mumbai | Updated on August 31, 2021

E-commerce giant cites SC order stalling the deal

Amazon has written a letter to the Securities and Exchange Board of India (SEBI) requesting to revoke the conditional approval given by the market regulator to the ₹25,000-crore Future Retail and Reliance Industries’ deal.

In a letter to SEBI chief, Ajay Tyagi, the e-commerce giant has cited the recent Supreme Court order that stalled the deal.

Earlier this month, the Supreme Court upheld the interim award passed by the Singapore International Arbitration Centre (SIAC) in favour of Amazon.

“In the light of the directions contained in the enforcement judgment and the emergency arbitrator order, whose validity has been affirmed by the Supreme Court, Amazon requests you to take all such action as is necessary to comply with the Supreme Court judgment and to further ensure that no communications subsist or emanate which are at variance with the Supreme Court judgment,” Amazon.com said.

The letter dated August 17 was reviewed by BusinessLine.

Amazon had moved the Indian courts to implement the interim award passed by Singapore International Arbitration Centre’s EA in its favour, effectively stalling the deal.

In its letter, Amazon said the observation letters were conditional on the outcome of the proceedings, and the Supreme Court has upheld the enforceability of the EA order which had injuncted inter alia the presentation, pursuit and carriage of the applications before the Indian stock exchanges.

“Accordingly, we request your good offices to direct the Indian stock exchanges to withdraw the observation letters with immediate effect,” it requested.

The row

The dispute between Amazon and Future Group dates back to 2019 when the former invested ₹1,400 crore in a sister concern Future Coupon Private Ltd (FCPL). As per the agreement, Future Retail could not sell its assets to ‘restricted parties’, including Reliance Industries.

In 2020, Future Retail went through a massive downturn because of the pandemic, forcing it to sell its assets to Reliance Industries.

This was contested by Amazon at SIAC, which passed an interim award in its favour. Meanwhile, both Future Retail and Reliance moved applications with the relevant authorities, including SEBI and the Competition Commission of India, in January 2021.

Conditional nod

Giving a conditional nod, SEBI had said, “It is observed that there are certain ongoing litigations/arbitration/legal proceedings against the draft scheme. In view of the same, the companies involved in the scheme are advised that these comments on the draft scheme of arrangement are subject to the outcome of any of the ongoing litigation/arbitration/legal proceedings involving the draft scheme and/or the decision by any competent authority/competent court in this regard.”

Meanwhile, Future Retail has filed a fresh case in the Supreme Court to get clearance for the deal.

Published on August 30, 2021

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