FRL playing elaborate fraud in collusion with RIL: Amazon | Mint
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Business News/ Companies / FRL playing elaborate fraud in collusion with RIL: Amazon

FRL playing elaborate fraud in collusion with RIL: Amazon

Just 11 days before takeover, FRL said all retail stores would be vested with FRL till the  transaction was approved by NCLT

There are no registered lease deeds entered by the landlords and MDA group or between FRL and MDA group, Amazon said.Premium
There are no registered lease deeds entered by the landlords and MDA group or between FRL and MDA group, Amazon said.

NEW DELHI : Future Retail Ltd (FRL) placed false statements before various courts and colluded with Reliance Industries Ltd to consummate their 24,713 crore takeover deal, US e-commerce giant Inc has alleged in a petition filed before the Supreme court on Saturday.

A copy of the petition was reviewed by Mint.

Amazon alleged that FRL never disclosed to a court or stock exchange that after the Singapore International Arbitration Centre’s (SIAC) order in October 2020, restraining FRL from entering into any deal with Reliance, it made sub-lease arrangements with the Mukesh Ambani-led group to operate at least 835 retail stores under Big Bazaar. In fact, just 11 days before Reliance took surprise control of the Big Bazaar stores, FRL told the courts on 15 February that all retail stores would continue to be vested with FRL till the deal was approved by the National Company Law Tribunal (NCLT), according to the petition.

FRL has played an elaborate and orchestrated fraud to procure favourable orders by continuously making false assurances in relation to the continued vesting of its retail stores with FRL, Amazon alleged.

The company also entered into arrangements with Reliance to alienate its retail stores in favour of the Mumbai-based conglomerate in a clandestine manner to ensure the impugned transaction goes through even before NCLT’s final order, Amazon alleged.

“FRL has not shown any document to prove that December 2020 January 2021 onwards, the lessors of the (Big Bazaar) stores’ premises began terminating the leases on account of non-payment of lease rentals by FRL ...In fact, the purported surrender deeds filed by FRL demonstrate that lease deeds were being surrendered voluntarily and not on account of any failure to pay lease rentals," it added.

“It is also incredible that there are no registered lease deeds entered by the landlords and MDA (Mukesh Ambani) group or between FRL and MDA group. The above facts demonstrate that MDA group is an accomplice to the orchestrated fraud committed on the courts and Indian statutory authorities," Amazon said.

Email queries sent to spokespeople for Future Group and Amazon remained unanswered. An email sent to Reliance late on Sunday seeking comment wasn’t answered immediately.

While the lease deeds were being transferred from landlords to RIL as the lessor, FRL had said during FY21 that it “did not have the money to clear the lease rental dues and prevent termination of leases with the landlords". “But in its annual report, FRL mentioned that it had enough money to meet all lease obligations."

On 31 December 2021, FRL said “the operating performance of FRL has been improving subsequent to the relaxation of the covid-led lockdown since July 2021, and revenues rose by 66% sequentially and 60% from a year earlier to 2,349 crore in the quarter ended 30 September 2021.

In January, FRL said it did not have money to repay lease rentals, but again on 18 February, FRL paid $14 million interest to bondholders on FRL’s 5.6% senior secured notes due in 2025. “The solitary payment was sufficient to make out a clear case of falsehood and obstruction of justice," Amazon said.

It has now said it had entered into “leave and license" agreements with Reliance Projects and Property Management Services Ltd in respect of certain store premises and did not enter into any agreement for the remaining stores. “This is an incredible statement as this means that a listed entity (FRL) which operates India’s second largest offline retail business entered into arrangements with MDA Group that operates India’s largest offline business, without even entering into formal agreements for operating such premises," Amazon alleged.

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Anirudh Laskar
Anirudh Laskar is a senior editor at Mint, with 17 years of experience. He has reported on significant corporate matters including large mergers and acquisitions, India's emerging e-commerce sector and regulatory issues in the financial services industry. Based out of Mint’s Mumbai bureau, Anirudh has worked with Business Standard and The Telegraph before joining Mint in 2009.
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Published: 04 Apr 2022, 12:13 AM IST
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