Independent directors on the board of Future Retail should have raised concerns related to the 2019 deal between Amazon and Future Coupons much earlier, according to proxy advisory firms.

Shriram Subramanian, Founder and MD of InGovern Research Services, said: “This letter by the independent directors seems to be another tactic in the war between the Future Group and Amazon. The IDs could have brought out the issues raised in this letter much earlier. It is not clear why they chose to be quiet all these days.”

JN Gupta, Managing Director at Stakeholders Empowerment Services, said even from a corporate governance perspective the independent directors would have to give more clarity on why the deal wasn’t a problem two years ago, and why it is a problem now.

Earlier this week, Future Group’s independent directors wrote a letter to the Competition Commission of India (CCI) urging the authority to cancel the approval for the 2019 deal between Amazon and Future Coupons. Their grounds were that Amazon concealed facts and misrepresented them and obtained approval on the basis that it was investing in the business of FCPL and not on the basis that it was acquiring rights over FRL in preference to all the shareholders, which it has claimed with success in the arbitral tribunal now.

This comes at a time when Amazon dragged Future Group companies to the Singapore International Arbitration Centre (SIAC) after Future Retail decided to sell its assets to Reliance Industries for ₹25,000 crore.

SIAC granted interim relief to Amazon and stayed the deal post which Amazon moved the Indian courts to implement the award, while Future Retail moved courts to stall the implementation.

Gupta pointed out that the single issue “exposes how companies are functioning,” adding that the Future Group was able to get everything passed by the board “because at that time (of the deal with Reliance) they were not seeing this threat (of being dragged into arbitration).”

Hetal Dalal, President and Chief Operating Officer at Institutional Investor Advisory Services (IiAS), explained that the Future Group, Amazon and Reliance Retail tangle highlight the need for stronger group governance structures.

She said, and Gupta echoed that “independent directors of the Future group may have then provided timely and stronger guardrails to the group’s capital structure, frequent restructurings of businesses, and related party transactions – in which case the group would not be in its current state of needing to sell assets and companies.”

A detailed query sent to Future Group remained unanswered.

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