Amazon moves SC over NCLAT ruling in Future case

While the 2019 deal was on, the Future Group in August 2020 decided to sell its retails assets to Reliance Retail for Rs 24,713-crore to repay its debt.

Amazon moves SC over NCLAT ruling in Future case
Amazon had opposed Future Retail's (FRL) deal and accused it of breach of contract on the basis of its 2019 transaction whereby it had acquired the 49% stake in FCPL, which owns 10% in FRL.

Amazon India has filed a petition before the Supreme Court challenging the National Company Law Appellate Tribunal’s (NCLAT’s) ruling that upheld the Competition Commission of India’s (CCI’s) order suspending its an over two-year-old approval to the 2019 deal with Future Coupons (FCPL).

While asking Amazon to pay the penalty of Rs 200 crore within 45 days, NCLAT had backed the CCI’s December 2021 findings that the e-commerce firm didn’t make full disclosures in its 2019 deal and had suppressed information while seeking clearances for the transaction.

Amazon, in its appeal, told the apex court that it had given all the details related to its proposed investment of Rs 1,431 crore in FCPL to the CCI. “The combination was notified to the CCI on the basis that the assets and turnover of FRL, in which FCPL held certain equity warrants, exceeded the jurisdictional thresholds. This significant aspect is relevant since Amazon was not acquiring any shares, voting rights, assets or control in FRL. This fundamental aspect has not been appreciated by either the CCI or NCLAT,” Amazon stated in its appeal.

According to Amazon, it had invested Rs 1,431 crore only after getting the CCI’s nod and the proceeds from its investment in FCPL flowed down to FRL.

Last week, the Mumbai Bench of the National Company Law Tribunal admitted Bank of India’s petition to initiate insolvency proceedings against FRL and had appointed Vijay Kumar V Iyer as an interim resolution professional. It had also dismissed the intervention application of Amazon, saying it was neither a stakeholder in FRL nor had any locus standi to question the initiation of proceedings. Amazon had alleged that the lenders had colluded with FRL to deny it its rights in the case. Future Group owes its 26 lenders over Rs 15,000 crore.

Amazon had opposed Future Retail’s (FRL’s) August 2020 deal where it decided to sell its retails assets to Reliance Retail for Rs 24,713 crore to repay its debt. The US giant accused Future of a breach of contract on the basis of its 2019 transaction whereby it had acquired the 49% stake in FCPL, which owns 10% in FRL.

However, the FRL-Reliance Retail deal was called off by Reliance Industries in April as FRL’s shareholders and lenders did not approve it. However, prior to it, in February, Reliance had taken over 947 stores of FRL, which it had sub-leased to it.

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