Connect with us

The Plunge Daily

Amazon writes to FRL’s independent directors; reiterates willingness to assist retailer

Amazon writes to FRL's independent directors; reiterates willingness to assist retailer


Amazon writes to FRL’s independent directors; reiterates willingness to assist retailer

Amazon has written to the independent directors of Future Retail Ltd (FRL) saying any sale of small format stores by the company without the consent of the US e-commerce giant would be in violation of injunctions, and reiterated its willingness to assist the cash-strapped retailer in addressing financial concerns.

In its latest letter on January 19, 2022, Amazon said it has become aware from certain media sources that FRL is proposing to sell its small format stores, comprising the ‘Easyday’ and ‘Heritage Fresh’ brands. “Please note that any sale of small format stores without obtaining the consent of Amazon would be in violation of the injunctions which continue to operate and are binding on FRL and directors of FRL, including the independent directors of FRL,” the letter, a copy of which was seen by PTI, said.

Also read: Adani Wilmar sets IPO price band at Rs 218-230/share

Amazon emphasised that it is “more than willing” to explore effective solutions to assist FRL. “Amazon reiterates that FRL is bound by valid and subsisting injunctions issued by the Arbitral Tribunal, and enforced by Indian Courts. Amongst others, FRL is prohibited from directly or indirectly taking any steps to transfer/dispose/alienate/encumber FRL’s Retail Assets without Amazon’s consent,” it said.

Amazon and FRL did not respond to queries seeking comments.

Future and Amazon have been locked in a bitter legal tussle after the US e-commerce giant dragged Future Group to arbitration at the Singapore International Arbitration Centre (SIAC) in October 2020, arguing that FRL had violated their contract by entering into a deal for the sale of its assets to billionaire Mukesh Ambani’s Reliance Retail on a slump sale basis for Rs 24,713 crore. Earlier this month, FRL had said it had missed the due date for payment of Rs 3,494.56 crore to banks and lenders as it could not sell assets due to its ongoing litigation with Amazon, impacting its monetisation plans.

Notably, in December, Competition Commission of India (CCI) had suspended the 2019 approval for Amazon’s deal to acquire a 49 per cent stake in Future Coupons Pvt Ltd (FCPL), FRL’s promoter and also slapped a penalty of Rs 202 crore on the e-commerce major. The CCI order has been challenged by Amazon before the National Company Law Appellate Tribunal (NCLAT), which has issued notice to the fair trade regulator and FCPL.

The NCLAT has directed the matter to be listed on February 2 for the next hearing. In the past too, Amazon has written to the independent directors of FRL on the ongoing issue on a number of occasions. Amazon, in the latest letter, said it has consistently emphasised its willingness to assist FRL before the Arbitral Tribunal and Indian Courts.

“We reiterate our willingness and ability to assist FRL in addressing any financial concerns of FRL, within the framework of the agreements, including the solution proposed in the term sheet between Samara Capital, and FRL, which contemplated an infusion of Rs 7,000 crore in FRL,” it added.

1 Comment

1 Comment

  1. Pingback: Stader Labs nets $12.5 mln led by Three Arrows Capital, others

Leave a Reply

Your email address will not be published.

To Top