The Enforcement Directorate (ED) has summoned Amazon’s Indian management as well as the promoters and officials of Future Group in regards to the dispute between the two companies. The federal agency, as per reports, is examining whether the global e-commerce giant was in breach of the Foreign Exchange Management Act (FEMA) when it invested Rs 1,431 crore to purchase a 49% stake in Future Coupons Pvt Ltd (FCPL) in 2019 and if it complied with regulations.
An Amazon spokesperson told ET that they are in receipt of summons issued by the ED in connection with the Future Group. “As we have just received the summons, we are examining it and will respond within the given time frame.”
It should be noted that Amazon has been claiming controlling rights over Future Retail at various judicial forums since it has 49% stake in Future Coupons. The Delhi High Court, while passing its judgment on Amazon’s plea, had early this year observed that the American company appeared to have indirectly obtained control over the Big Bazaar owner without the approval of the government.
As such, FCPL in March this year had complained to the Competition Commission of India (CCI) that Amazon had allegedly concealed information and misrepresented facts when it sought that watchdog’s approval for the deal. The independent directors of Future Retail has also written to the CCI, asking it to repeal the approval it had given to the Amazon-FCPL deal in 2019, reiterating the allegations.
The two companies, FRL and Amazon, have been caught in a nasty web of legal battles after the former decided to sell its retail assets to Reliance Industries for Rs 24,700 crore in 2020. The deal has been halted by the Singapore arbitration panel as well as the Delhi High Court following Amazon’s plea that the sale violated its contract with the Future Group.
This matter is before the Supreme Court.