Amazon got a favorable ruling against Reliance Retail’sbuyout of Future Group. The Future Group had its reasons for going ahead withthe sale to Reliance precipitated by the pandemic COVID 19.
However, Amazon had earlier purchased stake in an unlistedfirm of the Future Group and had secured a Right of First Refusal in case ofsale of the Future Group.
Kishore Biyani, the man who single-handedly created theFuture Group was running into loss of thousands of crore in the firm, about Rs about7,000 crore, due to Corona Virus-induced losses as mobility of individuals hadto be curtailed to contain spread of the pandemic.
Thus, when Reliance bought the Future Group, Amazon responded,and an arbiter was assigned with the proceedings being handled in Singapore.
The arbiter has ruled in the favor of Amazon and thus theReliance Retail's buyout of the debt-laden Future Group as the deal has beentemporarily stalled.
Reliance Retail Ventures Ltd in a statement said that it hasentered into the transaction for acquisition of assets and business of FutureRetail Limited under proper legal advice and the rights and obligations arefully enforceable under Indian law.
"RRVL intends to enforce its rights and complete thetransaction in terms of the scheme and agreement with Future group without anydelay," it said.
The arbitration panel, in an interim order, has directed theKishore Biyani-led Future Group not to proceed with the deal with RelianceRetail for now.
"We welcome the award of the Emergency Arbitrator. Weare grateful for the order which grants all the reliefs that were sought. Weremain committed to an expeditious conclusion of the arbitration process,"an Amazon spokesperson said.
Future Group, however, did not immediately respond on thematter.
In a major turn of events in the buyout of the businesses ofthe debt laden Future Group by Reliance Retail, e-commerce giant Amazon.comearlier this month stepped in and said that Future Group violated a contractwith it by entering into the sale agreement with the Mukesh Ambani-led retailmajor.
Last year, Amazon acquired a 49 per cent stake in FutureCoupons, a Future group entity.
In August, Reliance Retail Ventures Limited (RRVL), asubsidiary of RIL announced that it is acquiring the retail, wholesale,logistics and warehousing business from the Future Group as going concerns on aslump sale basis for lump sum aggregate consideration of Rs 24,713 crore,subject to adjustments as set out in the composite scheme of arrangement.
The acquisition is part of the scheme in which the FutureGroup is merging certain companies carrying on the aforesaid businesses intoFuture Enterprises Limited (FEL).
The war for the offline retail is on with companies buyingstake in established offline retail chains. Recently the online-marketplaceFlipkart, which is owned by the international juggernaut Walmart, purchased stakein Aditya Birla Fashion and Retail Limited.