5 MINS NEWS

PRESENTATION
(MKT516) Ayushee Tyagi
12002040
AMAZON CALLS RELIANCE'S TAKEOVER OF
FUTURE RETAIL STORES 'SHAM
TRANSACTION'
NEWS
 Amazon on Tuesday called the February takeover of 835 of Future Retail (FRL) stores by
Reliance a "sham transaction.“
 "There was a mysterious switch of the leases," Gopal Subramanium, the senior lawyer
representing Amazon, told the Delhi High Court during a hearing on Tuesday.
 The Delhi High Court will next hear the case on April 28 in an Amazon plea seeking
enforcement of a Singapore-based arbitral tribunal's order staying the sale of Future Group's
retail assets to Reliance Retail.
 In February, Reliance Projects & Property Management terminated sub-leases of about 800
Future Group stores and took possession as Reliance alleged Future Group failed to make
rental payments for more than a year amounting to Rs 4,800 crore.
NEWS
 On Tuesday, Subramanium called FRL's arguments that it could not pay the rents to landlords
and therefore, Reliance had to step in a make the payments an "absolute lie" and said FRL
managed to pay $14 million payment on a dollar bond in February.
 He said Future Retail never disclosed the lease transfer of 800-odd stores to Reliance that had
happened way back in March 2021 neither to the courts hearing the disputes between Amazon
and Future Group or to the stock exchanges as regulatory filings until the episodes came to
light in February.
 "I have to show you that no person is so big in this country or anywhere in the world that can
show its cheek and say I will deal with the law in whatever way I like," Subramanium argued
in the court on Tuesday talking about the arbitral tribunal's injunction that bars FRL from
alienating its assets till the tribunal gives it final order.
ANALYSIS
In September 2019, Amazon had acquired 49 per cent stake in Future Group subsidiary,  Future Coupons,
which owns 7.3 per cent shares in Future Retail. The e-commerce giant claimed that its deal had mentioned a
list of 30 entities with whom the Future Coupons could not transact, including Reliance Retail.
In August 2020, Kishore Biyani-led Future Group that was on the verge of bankruptcy signed an MoU with
Reliance Retail for the sale of its consumer retail arm for INR 24,713 Cr.  Post this deal, Amazon initiated
arbitration proceedings at the Singapore International Arbitration Centre (SIAC) and asked to block the deal.
After SIAC passed interim order to restrict the deal, Future approached Delhi Court in November 2020. 
The dispute reached the Supreme Court in April and in July 2021 the Competition Commission of India
(CCI) sent a show-cause notice to Amazon over the deal saying it was a misrepresentation of interests and
concealment of material facts. The conflict is still on with the SC recently seeking a response from the
Future Group on why arbitration proceedings by Amazon against it before a Singapore tribunal should not
resume.
ANALYSIS
 Amazon and Future group have been locked in a complex legal stand-off for more than a year now. 
 Future Retail lenders select Deloitte backed interim resolution professional to take the company to bankruptcy court

https://economictimes.indiatimes.com/industry/services/retail/future-retail-lenders-pick-resolution-professional-to-take
-company-to-bankruptcy-court/articleshow/90735705.cms?utm_source=contentofinterest&utm_medium=text&utm_ca
mpaign=cppst
 As the deal between the future group and amazon was regarding future coupons technically.
 Amazon is neither shareholder nor investor/lender in other Future group companies except coupons.
 Amazon now says that there is a collusion in between the two companies and reliance is using unfair means for
acquiring the stores and is somewhat seems to be true.
 Amazon should not bid to acquire Future group assets.
 Getting Future group companies via bankruptcy was the only option for Reliance because of ruckus made by Amazon.
 NCLT may ask Amazon to take out the investment with interest.
 Future retail has suffered the biggest loss here.
SOURCES
 https://economictimes.indiatimes.com/industry/services/retail/amazon-terms-reliance-takeover
-of-future-retail-stores-as-sham-transaction/articleshow/90671916.cms

 https://economictimes.indiatimes.com/industry/services/retail/future-retail-lenders-pick-resolut
ion-professional-to-take-company-to-bankruptcy-court/articleshow/90735705.cms?utm_sourc
e=contentofinterest&utm_medium=text&utm_campaign=cppst
THANK YOU