Connect with us

The Plunge Daily

AICPD, Prahar ask Amazon to back off from RIL-Future Group deal

Business

AICPD, Prahar ask Amazon to back off from RIL-Future Group deal

Traders’ body AICPD and NGO Prahar in an open letter on Thursday asked Amazon to ‘back off’ from blocking the Reliance-Future Group deal, alleging mall vendors and suppliers have become collateral damage in the current tussle between the companies. “Around 6,000 Indian small vendors and suppliers have dues of Rs 6,000 crore (USD 800 million) from the Future Group. “These dues are pending for payment since March 2020. The announcement of Future-Reliance deal in August 2020 had given us hope that our dues will be cleared soon,” All India Consumer Products Distributors Federation (AICPD) and Public Response Against Helplessness and Action for Redressal (Prahar) said in the letter.



AICPD claims to represent the collective voice of around ten lakh distributors, stockists and suppliers of FMCG goods across India. These small vendors and suppliers have become “collateral damage” in the current tussle between Amazon and Future group, the letter noted. “Payments of our members are blocked. Our families are in great financial stress and suffering from mental and emotional distress,” the letter said, and asked Amazon to back off or pay the debts of all its members. Amazon and Future Group are locked in a legal tussle over the sale of Future Group’s retail and wholesale business to Reliance Retail. Both parties have approached several legal forums. On August 29, 2020, Future Group had announced that its retail and wholesale business would be sold to Reliance Retail, owned by oil-to-chemical conglomerate RIL, in a Rs 24,713 crore deal. In August 2019, Amazon had agreed to purchase 49 per cent of one of Future’s unlisted firms, Future Coupons Ltd (which owns 7.3 per cent equity in BSE-listed Future Retail through convertible warrants), with the right to buy into the flagship Future Retail after a period of three to 10 years. In October 2020, Amazon had dragged Future Group to arbitration at Singapore International Arbitration Centre (SIAC), arguing that the Future Group has violated the contract by entering into the deal with Reliance.


Also read: India Ratings and Ratings maintains stable outlook on NBFCs for FY22

Amazon had first filed a plea before the single judge for enforcement of the October 25, 2020 Emergency Arbitrator (EA) award by the SIAC restraining FRL from going ahead with its Rs 24,713 crore deal with Reliance Retail. In its suit before the single judge of the Delhi High Court for enforcing the EA award, Amazon had sought to restrain FRL from taking any steps to complete the transaction with entities that are a part of the Mukesh Dhirubhai Ambani (MDA) Group. After the SIAC’s EA order, Amazon wrote to the Sebi, stock exchanges and CCI, urging them to take into consideration the arbitrator’s interim decision as it is a binding order. FRL thereafter moved the high court to restrain Amazon from writing to SEBI, CCI and other regulators about SIAC’s order, saying it amounts to interfering with the agreement with Reliance. A single judge on December 21 last year had on FRL’s plea passed an interim order allowing Amazon to write to the statutory authorities, but also said that prima facie it appeared the US e-commerce giant’s attempt to control Future Retail was violative of FEMA and FDI rules. Against the observations, Amazon moved an appeal before a division bench and during its pendency, Amazon filed the suit for the enforcement of the EA award.


Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

To Top
Loading...