Amazon has accused independent directors of Future Retail Ltd (FRL) of facilitating “fraudulent ruse” of the transfer of 835 stores to billionaire Mukesh Ambani’s Reliance group, saying the story of that transfer resulted from failure to paying huge outstanding rent was a “sham” as the retailer had stated a month prior to such a move that the outstanding rent was only Rs 250 crore.
The US retailer wrote to independent directors of FRL on May 19 that the company had met with key lenders on January 1, 2022, “categorically admitting that the unpaid lease fees were only Rs 250 crore. FRL further stated that it was voluntarily adhering to the amount of”.
“Surprisingly, FRL had managed to do this without ceasing any of its operations or handing over its stores,” it wrote.
As a result, any story that there was an alleged transfer for failure to pay the massive outstanding rent for a staggering 835 stores, which also as soon as February 26, 2022, is nothing but a sham and a false story for regulators. creditors, the shareholders and the courts,” it added.
Future and Amazon are embroiled in a bitter legal battle after US e-commerce giant dragged Future Group to arbitration at the Singapore International Arbitration Center (SIAC) in October 2020, arguing that FRL had breached their contract by entering into a deal for selling its assets to Reliance Retail of billionaire Mukesh Ambani at a low sales base of Rs 24,713 crore.
The Reliance deal fell last month after lenders to FRL turned it down. But before that, the Reliance group, called Amazon MDA group, took over the operations of dozens of Future stores after the retailer failed to pay rent.
“On January 22, 2022, FRL sent a letter to Bank of India, State Bank of India and Saraf and Partners, in which FRL reiterated its position on the sale of the small retail formats, in blatant disregard for the binding injunctions against it. the stores were not available with FRL, FRL would not be able to make such a statement,” Amazon said.
“The alleged transfer of FRL’s retail assets is therefore not for non-payment of outstanding leases.” “The alleged transfer is nothing but an intentional fraudulent act to promote the ruse of ostensibly alienating the stores, without following the rule of law. It was carried out without notice to the courts, regulators, lenders and motivated solely by the desire to final judgment issued in favor of Amazon in the arbitration proceeding,” it said.
An FRL spokesperson did not immediately comment on the story.
“The ruse to dispose of the stores grossly undervalues the stores and also falls under acts amounting to unlawful dealings to defraud creditors,” the warning stated that the promoters, KMPs and directors, including independents, could face prison terms under various provisions. be convicted. of the Act, including the Companies Act, 2013.
Amazon said FRL first stated on March 9 that terminations had been issued by entities affiliated with the MDA Group.
FRL further disclosed that at least 835 stores (representing 55 percent – 65 percent of FRL’s total sales) had allegedly closed, possibly to make way for stores operated by entities belonging to the MDA Group. FRL colluded , and in ongoing discussion, with the MDA Group,” it claimed.
“The circumstances surrounding FRL’s alleged surrender of the stores to the MDA Group show that the alleged ‘transaction’ was nothing more than a cover and ruse wrongly adopted by FRL, with the knowledge and conspiracy of the MDA Group, to supposedly transfer the stores.”
Amazon accused FRL of devising “a ruse to supposedly divest and transfer approximately 835 stores, including both large format stores such as ‘Big Bazaar’ and small format stores such as ‘Easy Day’ and ‘Heritage Fresh'” to Ambani’s Reliance (MDA Group) “in the teeth of binding injunctions and court orders.”
It said the retailer’s lenders rejected the sale of assets to Reliance, “was a telling fact, and points to a greater malaise in the way FRL and other associated companies have dealt with constitutional courts, regulators, lending banks, its shareholders.” and other stakeholders.” interests”.
Amazon stated that in January of this year, the independent directors rejected its proposal for financial support to FRL, citing the then-proposed sale to Reliance. possible means.”
“You, as independent directors, have facilitated this fraudulent ruse to defraud the Indian public and regulators,” it claimed.
(Except for the headline, this story has not been edited by DailyExpertNews staff and has been published from a syndicated feed.)