Amazon raises objections to Reliance Group’s takeover of Future stores

Mumbai: Ahead of a hearing in the Supreme Court, which had given Amazon Inc, Reliance Industries Ltd, and Future Retail Ltd 15 days to negotiate a settlement, the US e-commerce major on Tuesday raised objections to Future Group’s purported move to transfer and alienate its assets to the Mukesh Dhirubhai Ambani (MDA) group.

Amazon, in a public notice, said the transfer of Future Retail Ltd's (FRL) retail assets is being done in a clandestine manner by playing fraud on courts, tribunal and statutory authorities.

"It has now come to light that FRL and its promoters have been trying to remove the substratum of the dispute by purportedly transferring and alienating FRL's retail assets comprising the retail stores in favour of the MDA group," said Amazon in a public notice.

The notice by Amazon added “ It may be noted that Future Group and its promoters made false submissions before the Supreme Court stating that the retail assets would continue to vest in Future Retail until the scheme of arrangement with Reliance Group is approved by the National Company Law Tribunal. Such false statements were made knowingly”.

This comes in the middle of a protracted litigation that Future and Amazon are facing before the Supreme Court for a proposed ₹24,713 crore deal between Future and Reliance group.

The issuance of notice may further complicate and prolong the legal battle between the two.

Both Amazon and Future did not offer any comments in this regard. However, people aware of the matter said that "the negotiation before the Supreme Court is not connected to the notice that has been issued. This is merely pointing out in response to actions taken by Future as reported in media "

“Amazon hereby puts all persons concerned to notice that any attempt by Future Group promoters to transfer, dispose or alienate any of its retail assets is in violation of the arbitral tribunal, which operates as order of the Indian court and any party assisting in such fraudulent and contumacious actions will be liable for civil and criminal consequences under the law. This notice is issued reserving all rights under law,” the notice read.

Reliance has taken over nearly 500 stores operated by Future Group parent firm of hypermarket chain Big Bazaar which is facing an acute financial crisis.

Reliance's takeover began on the night of 25 February. Future - which has more than 1,700 outlets, including popular Big Bazaar stores - has been unable to make lease payments for some of its outlets. As a result, Reliance transferred the leases of some stores to its name and sublet them to Future to operate the stores.

Reliance has started to take possession of the premises in which Future Retail is operating its stores such as Big Bazaar and replaced them with its brand stores. It has also started to offer jobs to employees of Future Retail stores and bring them on Reliance Retail's payroll.

The ongoing legal tussle between Amazon and Future Group is over the sale of Future’s retail assets to Mukesh Ambani-led Reliance Industries Ltd. The proposed asset sale deal is worth ₹ 24,713 crores entered between Future and Reliance in August 2020.

The deal is being opposed by Amazon.com NV Investment Holdings LLC on the asset sale arguing that its investment of ₹1,400 crores in Future Coupons, which is one of promoters of Future Retail, allows it block asset sale to Amazon's competitors.