Future-Amazon feud: A promoter entity asked by ED for providing documents for probe, says Future Retail

By: |
November 10, 2021 8:09 PM

An interim award in favour of Amazon barred FRL from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.

future retailIn November 2019, the CCI had given its approval for Amazon to acquire a 49 per cent stake in FCL. (File)

A promoter entity of the Kishore Biyani’s Future Retail Ltd (FRL) has been asked by the Enforcement Directorate (ED) to provide documents pertaining to the embattled retail giant’s 2019 deal with Amazon, the firm said on Wednesday.

FRL, however, said it has not received any direction to provide any document.

“As regards the Enforcement Directorate, FRL is not in receipt of any directions to provide information and documents in connection with the Enforcement Directorate’s investigations,” a regulatory filing by FRL, said.

FRL’s submission came in response to a clarification sought by BSE over a report that claimed that the ED had sought documents from Future Group on the disputed deal with Amazon for selling 49 per cent stake in Future Coupons Pvt Ltd (FCPL). FCPL is a shareholder in Future Retail.

“It may be noted that no proceedings have been initiated against FRL for such a direction to be reported to stock exchanges. Please also note that without permission of the Enforcement Directorate, we would not be able to share correspondence promoter entity had with them. As and if and when there is any development to report, we shall do so,” FRL said.

The development comes days after the independent directors of FRL approached the Competition Commission of India (CCI), urging it to revoke the approval it had given to the Amazon-FCPL deal in 2019, alleging the e-commerce major of “making false statements before it”.

The Commission should immediately confirm the revocation of the approval granted to Amazon for its investment in FCPL, the letter had said.

“CCI would have become wary and forwarded the papers to DEA (Department of Economic Affairs) for examination if the acquisition of controlling rights is allowed under FEMA regulations,” they had said adding that “Amazon has cleverly prevented CCI from doing this and has taken shelter that its investment in FCPL is under automatic route”.

In November 2019, the CCI had given its approval for Amazon to acquire a 49 per cent stake in FCL.

In August last year, Reliance Retail Ventures Ltd, a subsidiary of Reliance Industries Ltd had announced the acquisition of the retail and wholesale business, and the logistics and warehousing business of Future Group for Rs 24,713 crore.

Amazon is contesting the deal through its shares in FCPL and had approached Singapore International Arbitration Centre (SIAC). The companies have also approached Indian courts in this matter.

In October last year, an interim award was passed by the EA (emergency arbitrator) in favour of Amazon that barred FRL from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.

This was also upheld by SIAC last month and said FRL is a party to the ongoing arbitration between Amazon and Future group in the dispute over sale of its assets to Reliance Retail.

 

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