NEW DELHI (Reuters) – Amazon.com Inc AMZN.O have complained to Indian market control that their local partner is Future Retail Ltd FRTL.NS Fooled shareholders by incorrectly saying they were complying with contractual obligations with the US e-commerce giant, a letter was shown by Reuters.
Amazon is entangled in a fierce legal dispute with Future Group, which in August sold its retail assets to Reliance Industries Ltd led by Mukesh Ambani. RELI.NS for $ 3.4 billion. Amazon alleges the deal violated Future̵7;s 2019 agreements.
The conflict has strained Amazon’s relationship not only with Future Retail – one of India’s top retailers – but also with Ambani, Asia’s richest man and his Reliance conglomerate. The company is rapidly expanding its e-commerce business and intimidating companies like Amazon.
Last Sunday, Amazon won an order to suspend Future’s deal with Reliance from a Singapore arbitrator that both sides have agreed to use in the event of a dispute. The Indian retailer later said in a press release that it had complied with all the agreements and “could not be prevented” by the arbitration proceedings.
In a letter to Chairman Ajay Tyagi of the Indian Securities & Exchange Council (SEBI) on Wednesday, Amazon said the news release and disclosure of Future’s stock exchange were violating the regulations of India, urged regulators to investigate the matter and disapproved of the deal.
“Such disclosure is against the interests of the public, misleading the public shareholders … as well as upholding a scam for the benefit of Biyanis,” the Amazon letter said, referring to Future’s promotional family led by Kishore Biyani.
Future Group spokespersons and Biyani’s family declined to comment. A source of the Future team has denied Amazon’s allegations, saying that there are no suspicions of fraud or misleading to the public or shareholders without detailed explanation.
Amazon declined to comment on its letter, the content of which has not been previously reported. Reliance and SEBI did not respond to a request for comment.
“DANGER CAN BE WITHDRAWAL”
Amazon says the 2019 deal, in which it invests close to $ 200 million in a Future unit, has a clause that says the Indian conglomerate cannot sell its retail assets to anyone on the list. “Restricted People”, including Reliance.
Reliance, which in August acquired Future’s retail, wholesale and several other businesses, said it plans to “exercise its rights and complete a transaction (Future) … without be delayed ”.
The face-to-face comes as Amazon-led by Jeff Bezos has been faced with stricter foreign investment rules and antitrust lawsuits in India, one of the key growth markets where it has pledged. investment of 6.5 billion USD.
Some Indian lawyers have argued that the Singapore arbitration order in favor of Amazon does not automatically go into effect and will require the approval of an Indian court. But Amazon believes the order is bound, it told SEBI. The letter asked the regulator to “suspend review” of the agreement.
SEBI’s action in this regard “will promote ease of doing business in India by requiring listed companies to be held accountable for their transactions,” the Amazon letter wrote.
Amazon says the Future-Reliance deal means the American giant will lose its prospect of becoming the largest shareholder of the Indian retailer, which has a “wide and irreplaceable network” with more than 1,500. Retail store.
Future has argued that they entered into an agreement with Reliance because their retail business was seriously affected during the COVID-19 pandemic and it is important to protect all stakeholders.
The arbitrator, VK Rajah, a former attorney general for Singapore, sided with Amazon in the October 25 order, saying: “The law wants entrepreneurs to respect their contractual commitments.”
The US company told SEBI that if the Future-Reliance agreement “is done by completely ignoring the interim (arbitration) ruling, it will cause irreversible harm and injury to Amazon. “
Report by Aditya Kalra in New Delhi; Additional reporting by Abhirup Roy in Mumbai; Edited by William Mallard