The development has come following Future Retail Ltd's (FRL) independent directors on Sunday writing to the Competition Commission of India (CCI) Chairman on the matter.
Traders’ body CAIT on Wednesday said it has urged the Competition Commission of India to revoke the approval granted to Amazon two years ago for its deal with Future Coupons, alleging that the e-commerce major had made false statements for getting the regulatory nod.
The development has come following Future Retail Ltd’s (FRL) independent directors on Sunday writing to the Competition Commission of India (CCI) Chairman on the matter.
The Confederation of All India Traders (CAIT) also wrote to the CCI highlighting the claims made by Future Retail’s independent directors.
“Paragraph 16 of the Commission’s order dated 28-11-2019 approving Amazon’s investment in FCPL states that the approval given by the Commission to the Combination stands revoked if, at any time, the information provided by the Acquirer is found to be incorrect. So in our view the Commission has no alternative to revoking the approval,” CAIT said.
It argued that the CCI cannot derelict from its duty of revoking the approval given by using its powers under section 45 of the Competition Act.
Any other action of Commission, such as levy of penalty, will not suffice and will be illegal and will be against public policy and cause public harm, the trader’s body stated.
“Considering the urgency of the matter and the attached public interest and public good, we request you to take immediate action of declaring that the approval granted to Amazon stands revoked and respond to our letter at the earliest,” CAIT stated.
CAIT claimed that all representations made by Amazon to CCI at the time of seeking approval are false representation, misrepresentation and concealment.
“It is deliberate and intentional only to obtain approval by any means so that controlling rights over FRL are obtained,” CAIT said.
Amazon did not respond to an emailed query on the matter.
In escalation of the Future group-Amazon feud, Future Retail Ltd’s independent directors have urged the Competition Commission to revoke the approval given two years ago for Amazon’s deal with Future Coupons, alleging that the e-commerce major had made false statements for getting the regulatory nod.
Future Retail Ltd’s (FRL) independent directors on Sunday wrote to the Competition Commission of India (CCI) Chairman on the matter.
The CCI should immediately confirm the revocation of the approval granted to Amazon for its investment in Future Coupons Pvt Ltd (FCPL), according to the letter written by the independent directors to the regulator.
“Time is of the essence and the Commission should act immediately. Any delay would result in severe repercussions,” it added.
A copy of the letter has been submitted to the stock exchanges by FRL.
According to the letter, the confirmation from the Commission will enable the independent directors to “discharge their fiduciary duties towards lakhs of small public shareholders of FRL, lenders and creditors of FRL and to protect public interest”.
The approval given by the Commission does not hold good due to the concealment and misrepresentation and false representations made by Amazon, as per the seven-page letter written to CCI Chairman Ashok Kumar Gupta.
The independent directors have also requested CCI to stop Amazon from “perpetuating its evil non-desirable designs” to make FRL bankrupt and jeopardise Rs 30,000 crore of debt extended by public sector banks to Future group.
In November 2019, CCI had given its approval for Amazon to acquire a 49 per cent stake in FCPL and FCPL is a shareholder in Future Retail Ltd.
According to the letter, Amazon had “not disclosed its strategic interest over FRL” while getting approval from the CCI to prevent it from referring the transaction to other governmental agencies that “would have responded that the transaction is illegal”.
“Amazon has concealed facts, made misrepresentations and false representations to the Commission,” the letter alleged.
Amazon had tried to avoid reporting and assessment by the Commission of the actual transaction effected by Amazon including that of the commercial agreements, the directors submitted.