Future Retail directors’ letter only to create confusion, says Amazon

“It is obvious that the letter from FRL’s independent directors was issued with the sole motive to obfuscate issues that the independent directors are obligated to answer. In fact, the letter raises serious concerns about corporate governance norms at FRL,” Amazon said in its latest letter.

Earlier on June 27, following the completion of hearings, the National Company Law Tribunal’s (NCLT) Mumbai bench had reserved its order. On its part, Amazon had filed an interlocutory application asking the tribunal to reject the petition.
Earlier on June 27, following the completion of hearings, the National Company Law Tribunal’s (NCLT) Mumbai bench had reserved its order. On its part, Amazon had filed an interlocutory application asking the tribunal to reject the petition.

Continuing its war of words with Future Group, US retailer Amazon has alleged that a letter sent by the independent directors of Future Retail (FRL) was to only obfuscate the issues they were obligated to answer. The e-commerce giant denied all the allegations and sought withdrawal of the letter with “immediate effect”, even as it urged FRL’s independent directors to discharge their statutory obligations.

The Amazon letter dated July 4 came ahead of a tribunal’s order, which is expected anytime, in a petition filed by Bank of India (BoI) seeking insolvency proceedings against debt-laden FRL.

Earlier on June 27, following the completion of hearings, the National Company Law Tribunal’s (NCLT) Mumbai bench had reserved its order. On its part, Amazon had filed an interlocutory application asking the tribunal to reject the petition.

“It is obvious that the letter from FRL’s independent directors was issued with the sole motive to obfuscate issues that the independent directors are obligated to answer. In fact, the letter raises serious concerns about corporate governance norms at FRL,” Amazon said in its latest letter.

Amazon was referring to a May 28 letter by FRL’s independent directors, which said Amazon was neither a shareholder, nor a creditor of FRL, and it does not have any locus to address any letter to them.

The US retailer also reiterated its demand that a “thorough and independent investigation” was required, including by statutory authorities, regulators and enforcement agencies into the accounts and financial dealings of FRL and the Biyani family. This was needed in the interest of FRL’s public shareholders, it added.

Amazon also sought FRL’s independent directors to raise concerns over the proposed plans to sell supply chain and logistics businesses to MDA Group (Reliance Industries), which is an extension of the fraudulent stratagem being implemented. This is implemented in collusion with the MDA Group and in utter derogation of the rule of law, the letter added.

Amazon, in the letter, also repeated its earlier allegations that Future Group was in negotiations with RIL to sell its supply chain and logistics businesses. It also alleged that FRL, despite stating in a March 16 disclosure that RIL had “forcefully” taken over its retail stores and its board had objected to such actions, now intends to enter into a business transaction with it. This clearly demonstrates that the statements made by FRL in the March 16 disclosure were false, it added.

“We sincerely hope that, for once, you will cease to act for the benefit of the promoters and act in accordance with your statutory duties and obligations…” the letter added.

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