The National Company Law Tribunal (NCLT) has stopped the Future Group companies from calling the shareholders’ meetings. This is a legal setback for the company as it was looking for approval for the proposed Rs 24,713 crore asset sale to Reliance Industries.
Future Retail had filed a special leave petition before the Supreme Court on Monday against Delhi High Court’s 29 October interim order on the verdict by an arbitration court in Singapore. A spokesperson for the company said Future Coupons Pvt Ltd (FCPL) and the promoters of Future Retail Ltd (FRL) have also filed an appeal before the Supreme Court of India.
The Delhi High Court had rejected Future Retail’s plea to stay the 21 October interim order passed by the Singapore arbitration court. It asked Amazon to respond to the matter and has scheduled the next hearing for 4 January.
It should be noted that the Singapore International Arbitration Center had rejected the Indian company’s appeal to vacate the interim stay on the company’s deal with Reliance Industries passed in October 2020. SIAC also held that Future Retail is a party to the matter between Amazon and Future Group, rejecting Future Retail’s request to be excluded from the arbitration proceedings.
As such the independent directors of Future Retail have written to the Competition Commission of India (CCI) to cancel the approval given to Amazon in August 2019 to buy a 49% stake for Rs 1,431 crore in Future Coupons. They alleged in the letter that Amazon concealed information regarding its intention to gain control of Future Retail through its investment in FCPL to avoid hassles of getting regulatory clearances. The independent directors stated that had the global e-commerce giant expressed its intent to have control in FRL, it would have faced a hurdle due to India’s foreign direct investment norms which do not allow a foreign firm to own a majority stake in an Indian multi-brand retailer.
Amazon, on October 30, wrote to Sebi and exchanges to direct Future Group to disclose complete information regarding the orders passed by the courts and prevent Future Retail from calling a shareholders’ meeting to get approval on the deal with Reliance Industries.