New Delhi:
Amazon has warned Future Retail Ltd (FRL) not to hold shareholder and creditor meetings next week to approve the sale of its retail assets to Reliance Retail from billionaire Mukesh Ambani.
In a 16-page letter to Kishore Biyani and other promoters on April 12, the US e-commerce giant said such gatherings are illegal and would not only violate 2019 agreements when Amazon made investments in FRL’s promoter company, but also violates the order of a Singapore arbitration tribunal on the sale of retail assets to Reliance.
The letter, signed by a representative of Amazon.com NV Investment Holdings LLC, asked the Biyani group to strictly abide by the Emergency Arbitrator’s orders and “ensure that no further steps are taken to proceed” with the transaction.
Future has convened a shareholders’ meeting on April 20 and that of creditors on April 21 to seek their approval for the proposed Rs 24,713 crore deal with Reliance.
The move follows the Feb. 29 order of the National Company Law Tribunal (NCLT), in accordance with a Feb. 15 Supreme Court order that allowed Future Group companies to call a shareholders’ and creditors’ meeting.
However, Amazon believes that such gatherings are illegal.
“Any attempt to overturn the injunctions and attempt to vote on the basis of forged documents, in light of Amazon’s categorical denial that it has not authorized the directors of Future Coupons Pvt Ltd (FCPL) or any representatives of FCPL or the promoters would amount to taking cognizance of a forged document with the intent to deceive and deceive all parties, whether acting directly or instigating such act, would be liable for actions in accordance with the law “, it said.
Amazon is opposing Reliance’s August 2020 offer to buy Future Retail’s stores and warehouses for Rs 24,713 crore because the deal violated the 2019 agreement by which it acquired a 49 percent stake in FCPL, the promoter entity. from Future Retail, for about Rs. 1,500 crores.
It has dragged Future into arbitration and into courts to block the Reliance deal.
Reliance quietly began taking over the leases of hundreds of stores once run by Future Retail and Future Lifestyle Fashions Ltd in late February, amid lawsuits and arbitration in India and Singapore.
“It is reiterated that any action to vote in favor of the Scheme or any action to promote or support the Scheme without Amazon’s consent by any director, authorized representative, proxies or agent on behalf of the Promoters, Promoter Entities or FCPL would be considered as an express violation committed by the promoters and FCPL of valid and binding injunctions against them,” Amazon wrote.
The US giant said FCPL and FRL’s promoters have been banned from taking steps to promote the Reliance deal as the Delhi High Court has not passed any injunction allowing the calling of shareholders’ and creditors’ meetings.
“In terms of the FCPL Shareholders Agreement (SHA) and the FRL SHA (both agreements have been executed by the Promoters and FCPL), various covenants and commitments have been made by the Promoters, including that they will continue to administer and control FRL.
“Further, under the above agreements, FRL’s retail assets were entrusted to the promoters on the express condition that the retail assets could only be disposed of in the manner prescribed in the agreements, and in any event never to a restricted person,” the statement said. said.
Reliance was categorized as a person with restricted rights, according to Amazon.
“In addition, the promoters and FCPL have committed themselves not to act without Amazon’s consent with respect to any of the matters mentioned in the agreements,” it said, adding that Amazon did not authorize and approve a transaction involving a restricted person.
“It is reiterated that the proposed transaction with the Mukesh Dhirubhai Ambani Group results in the cessation of the activities and existence of FRL itself, as well as the transfer of FRL’s retail assets to a limited person, which is the basis of the investment of Amazon and its protection and substantive rights,” it wrote.