Amazon got a favorable ruling against Reliance Retail’s buyout of Future Group. The Future Group had its reasons for going ahead with the sale to Reliance precipitated by the pandemic COVID 19.
However, Amazon had earlier purchased stake in an unlisted firm of the Future Group and had secured a Right of First Refusal in case of sale of the Future Group.
Kishore Biyani, the man who single-handedly created the Future Group was running into loss of thousands of crore in the firm, about Rs about 7,000 crore, due to Corona Virus-induced losses as mobility of individuals had to 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 the Reliance Retail's buyout of the debt-laden Future Group as the deal has been temporarily stalled.
Reliance Retail Ventures Ltd in a statement said that it has entered into the transaction for acquisition of assets and business of Future Retail Limited under proper legal advice and the rights and obligations are fully enforceable under Indian law.
"RRVL intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay," it said.
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The arbitration panel, in an interim order, has directed the Kishore Biyani-led Future Group not to proceed with the deal with Reliance Retail for now.
"We welcome the award of the Emergency Arbitrator. We are grateful for the order which grants all the reliefs that were sought. We remain committed to an expeditious conclusion of the arbitration process," an Amazon spokesperson said.
Future Group, however, did not immediately respond on the matter.
In a major turn of events in the buyout of the businesses of the debt laden Future Group by Reliance Retail, e-commerce giant Amazon.com earlier this month stepped in and said that Future Group violated a contract with it by entering into the sale agreement with the Mukesh Ambani-led retail major.
Last year, Amazon acquired a 49 per cent stake in Future Coupons, a Future group entity.
In August, Reliance Retail Ventures Limited (RRVL), a subsidiary of RIL announced that it is acquiring the retail, wholesale, logistics and warehousing business from the Future Group as going concerns on a slump 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 Future Group is merging certain companies carrying on the aforesaid businesses into Future Enterprises Limited (FEL).
The war for the offline retail is on with companies buying stake in established offline retail chains. Recently the online-marketplace Flipkart, which is owned by the international juggernaut Walmart, purchased stake in Aditya Birla Fashion and Retail Limited.