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Monday, July 26, 2021

Amazon filing on Future group deal: CCI marks ‘discrepancies’

Amazon is currently in a legal tussle with Future group over the latter’s plans to sell its retail businesses to Reliance Retail.

Written by Karunjit Singh | New Delhi |
Updated: July 23, 2021 7:40:40 am
The Supreme Court is currently hearing a matter on whether an emergency arbitration award won by Amazon in the Singapore International Arbitration Centre is valid and whether the Kishore Biyani-led Future group can be restrained from completing the transaction.

THE COMPETITION Commission of India has served Amazon a show-cause notice over “discrepancies” in filings made by the company while seeking approval for its acquisition of a 49 per cent stake in Future group company, Future Coupons Pvt Ltd (FCL).

Amazon is currently in a legal tussle with Future group over the latter’s plans to sell its retail businesses to Reliance Retail. The Supreme Court is currently hearing a matter on whether an emergency arbitration award won by Amazon in the Singapore International Arbitration Centre is valid and whether the Kishore Biyani-led Future group can be restrained from completing the transaction.

“We have sought some clarifications from Amazon over some discrepancies that we have found in their filings,” a government official told The Indian Express.

Sources aware of the developments said the show-cause notice contends that Amazon might have concealed a strategic interest in Future group when it submitted its filings for approval.

An Amazon spokesperson confirmed that the company had received a show-cause notice from the CCI “as part of an ongoing dispute”.

“We are confident that we will be able to address the CCI’s concerns. However, as our dispute with Future is pending litigation, and we are also bound by confidentiality obligations, we are unable to comment on the merits or substance of any allegations at this stage and that seem to be raised deliberately in the media in the context of ongoing legal proceedings.” the spokesperson said.

Explained

Sebi, BSE okayed deal

Sebi and the BSE have okayed the Future-Reliance Retail transaction despite protests from Amazon. The decision to sell retail assets to Reliance Retail came amid pressure from creditors that the company pare debt.

The acquisition of Future Coupons Pvt Ltd is a key part of Amazon’s argument for halting the sale of the Future Group’s retail assets to Reliance Retail, as the deal reportedly contains covenants that grant Amazon the right of first refusal on any stake sale in FCL by its promoter entity Future Retail Ltd.

The Securities and Exchange Board of India and the BSE have already approved the Future-Reliance Retail transaction, valued at about Rs 24,713 crore, despite protests from Amazon.

M M Sharma, head of competition law at Vaish Associates, said such instances were rare and that any company found to be omitting material information or making false submissions in filings related to combinations could be fined under the Competition Act.

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