Future says Amazon has no voting rights in Reliance deal: Report

Future says Amazon has no voting rights in Reliance deal: Report
Photo Credit: Reuters
12 Nov, 2020

Future Retail (FRL) on Thursday told the Delhi High Court that Amazon expects it to take the ecommerce giant’s permission to avoid bankruptcy, despite having no voting rights or board position, as per a Bar and Bench report.

The court was hearing Future Retail's arguments concerning its deal with Reliance Retail, which was put on hold by an emergency arbitrator of the Singapore International Arbitration Centre (SIAC) in favour of Amazon.

Read: Future Retail moves Delhi HC to seek relief from SIAC order

In its plea, the Kishore Biyani-led firm alleged that Amazon was interfering in its deal with Reliance Retail on the basis of the international arbitrator’s interim order.

“This whole concept of minority rights being protected is nonsense. Thousands may lose jobs, FRL (Future Retail) may go bankrupt but this great American giant should not be upset… In today's day and age, to say that I will kill a (Rs) 25,000 crore company. God knows if Amazon still thinks that it's living during the time of the East India Company,” Future Retail’s counsel Harish Salve was quoted as saying in the report.

An Amazon spokesperson declined to comment on the matter, stating it as pending litigation.

Future Retail did not respond to a request for comment.

Thursday’s hearing at the high court concluded with Salve’s arguments in the afternoon, with the lawsuit adjourned till November 19.

On Tuesday, the first day of hearing, Amazon had said that all parties had agreed to arbitration before the SIAC and that the arbitral award was valid and legal. 

Senior advocate Gopal Subramanium, appearing for Amazon, had said that the Jeff Bezos-led company had arranged for a rescue deal for Future Retail with private equity firm Samara Capital. The latter, he said, had offered its term sheet and intended to invest in Future.

Separately, on Wednesday, Reuters reported that Amazon had asked India’s market regulator to investigate Future Retail for insider trading.

The United States ecommerce giant has been pressing the Securities and Exchange Board of India (SEBI) to review Reliance’s August deal to buy the retail, logistics and other assets from Future Group for $3.4 billion, including debt, Reuters said, citing Amazon’s letter to SEBI.

Future Retail, in a separate statement to Reuters, said that it had communicated with Reliance Industries on an arbitration order related to its dispute with Amazon for a “legitimate purpose.”

“Proprietary and legality demands that in such an event, the counterparty is informed about the development... SEBI Regulations too are quite clear on this,” Future Retail reportedly said, adding that Amazon needed a “tutorial on the law on insider trading.”