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MUMBAI : Inc. alleged that Future Retail Ltd colluded with Reliance Industries Ltd to willingly surrender store leases to India’s most valuable company, violating a court injunction against transferring the prized assets.

According to court documents accessed by Mint, Future Retail entered into back-to-back arrangements with the constituents of the MDA (Mukesh Dhirubhai Ambani) Group to operate out of these leased premises, subject to rent payments to the MDA Group.

“The circumstances in which the alleged surrender of the leases led to the transfer to the Reliance Group, and the fact that Reliance thereafter pretended to grant Future Retail a license to continue operating as a licensee out of the same premises, while the subsequent surrender of such licenses led to Reliance ‘taking over and operating’ the said 950 retail premises is nothing but a guise and a stratagem wrongfully adopted by Future Retail, with the connivance and collusion of the MDA Group, to transfer the retail assets," Amazon said in the petition reviewed by Mint.

Amazon filed a petition in the Supreme Court seeking to stop the transfer of retail assets. While the apex court did not grant interim relief, it allowed the companies to proceed with arbitration. The court will hear the matter again on 23 March.

With the most prized possessions of Future Retail—stores at attractive locations—being taken over by Reliance group firms, creditors and shareholders of the Kishore Biyani-led company may have little left in terms of substantial value.

Reliance’s takeover of the stores comes after Amazon blocked Future Group’s plan to sell its retail and wholesale assets to Reliance in a 24,713 crore deal for more than a year. Amazon, which invested 1,431 crore in Future Coupons Pvt. Ltd in December 2019, challenged the sale to Reliance on the grounds that clauses in the investment agreement barred Future Group from selling its assets to specified rivals, including Reliance.

Emailed queries sent to spokespeople for Amazon, Reliance Industries and Future Retail were not answered.

However, in a stock exchange filing on Wednesday, Future Retail said Reliance Group unilaterally terminated the leases and forcefully took control of hundreds of Future Retail’s stores.“Such termination of leases and takeover of stores by Reliance Group has come as a surprise to Future Retail and its board since, throughout the entire period, Future Group and Reliance Group have been collaborating to ensure full continuity of businesses," said Future in an exchange filing.

“Future Retail’s board has expressed ‘strong opposition’ to Reliance Group’s conduct and has asked the company to rethink all other steps taken in the recent few days," it added.

Amazon, in the court documents, also detailed why it considers Future Retail’s conduct as one of so-called ‘connivance’.

The US company said it has documents about the operation of a “Big Bazaar" outlet in Forum Celebration Mall, Udaipur, Rajasthan, which lays bare the alleged fraud by both Future and Reliance Industries.

According to the documents, Future Retail entered into a long-term lease deed with Flicker Projects Pvt. Ltd for leasing the premises in Forum Celebration Mall in September 2014. The lease was for 19 years and 11 months. On 11 March 2021, Future Retail entered into a deed with Flicker Projects to surrender the lease. The surrender would be operative on 28 February 2021.

“Pertinently, the surrender deed did not contain any statement that the lease was being surrendered on account of non-payment of lease rent," Amazon said.

According to Amazon, similar surrender documents were issued for properties in several parts of India. Amazon also has a legal copy of the surrender deed signed by Future Retail and MEL Properties Pvt. Ltd for the lease of the premises at Coconut Avenue Road, Malleswaram, Bangalore.

“On 12 March, the very next day and a day after Future Retail filed an application to vacate the EA (emergency arbitrator award) order before the arbitral tribunal, Future Retail entered into an arrangement with Reliance Projects and Property Management Services Ltd for continuing to conduct the retail business," said Amazon in the court documents.

This was again in direct violation of the directions in the emergency order and was not disclosed to this hon’ble court or the high court or the arbitral tribunal, it said.

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