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Business News/ Companies / News/  Future says takeover of stores by Reliance came as a surprise
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Future says takeover of stores by Reliance came as a surprise

FRL has not handed over the stores to Reliance, Future Retail informed the stock exchanges

Future Retail further said its board remains committed to take all such action as may be necessary to seek value adjustments and reversal of takeover of the stores (leases) by Reliance Group (Reuters)Premium
Future Retail further said its board remains committed to take all such action as may be necessary to seek value adjustments and reversal of takeover of the stores (leases) by Reliance Group (Reuters)

Future Retail Ltd (FRL) on Wednesday accused Reliance Industries of forcefully taking over stores and asserted that it did not handover any of the retail units to the oil-to-telecom conglomerate.

On Wednesday, Reliance shares closed 1.61% higher at 2,401.50 apiece on NSE.

“There have been several media reports and public notices issued by Amazon misreporting that FRL has handed over retail assets of FRL to Reliance in breach of orders of tribunal and Supreme Court of India. Such reporting is inaccurate and factually erroneous," Future Retail informed the stock exchanges.

FRL has not handed over the stores to Reliance, Future said. 

The crisis-hit company added that FRL’s Board had two meetings and notified Reliance that such a drastic and unilateral action to takeover the stores has not only come as a surprise but also complicated the positive scenario, which had started building up after the CCI order in December 2021, in favour of the Scheme and Future Group.

Future said its board remains committed to take all such action as may be necessary to seek value adjustments and reversal of takeover of the stores (leases) by Reliance Group.

"FRL and its Board is taking steps to arrive at a feasible solution which will be in the interests of all stakeholders," it said.

Further, Future Retail said its Board had also objected to act of Reliance issuing offer letters to employees of FRL, since the transfer of employees was envisaged to take place pursuant to the Scheme and not through any other mechanism. "FRL Board had once again requested to reconsider the issuance of the termination notices, offer letters to employees and other actions initiated by them in recent past," the company said.

Future Retail had earlier informed the bourses that it has received certain termination notices in respect of sub-leased properties from Reliance Group. The company said that it has received notices for 342 large format stores and 493 small-format stores.

Amazon.com Inc on Tuesday accused the Reliance and Future Group of 'fraud' and said such 'contumacious' transfer will be liable to legal action. In advertisements in leading newspapers headlined 'Public Notice', Amazon said: "These actions have been done in a clandestine manner by playing a fraud on the Constitutional Courts in India, the Arbitral Tribunal and Indian statutory authorities/agencies".

Future Group ran India’s biggest retail grocery chain before the pandemic struck, making it a juicy target for two of the world’s richest men -- Ambani and Amazon’s Jeff Bezos -- as they jostle for control of the only billion-plus consumer market where foreign firms can compete.

Future - which has more than 1,700 outlets, including popular Big Bazaar stores - has been unable to make lease payments for a bulk of its outlets.

With landlords insisting on payments or shutting down of stores, Reliance transferred the leases of some stores to its name and sublet them to Future to operate the stores. It also offered all the 30,000 employees of Future Retail jobs.

In addition, a majority of inventory at these stores was being supplied by Reliance JioMart as a cash-strapped FRL could not clear dues to existing suppliers.

Meanwhile, earlier today, Amazon Inc. and Future group told the Supreme Court that talks between the estranged partners failed to break an impasse over the sale of the latter’s assets to Reliance.

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Published: 16 Mar 2022, 05:30 PM IST
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