Despite a legal battle between Future Group and e-commerce giant Amazon, Reliance Industries is set to provide operational support to the Indian retail chain. It has to be noted that the Rs 24,713 crore deal between Reliance Industries and the Future Group is still awaiting nod from the National Company Law Tribunal (NCLT).
According to Mint, Reliance Retail, a subsidiary of RIL, has extended the internal deadline to secure regulatory approvals and complete the deal scarred by legal cases over the past couple of months. Future Group is also in a financial crisis, and is struggling to repay about $2.5 billion in dues. The Kishore Biyani group owns about 1,500 Big Bazaar and fbb stores, employing about 70,000 people.
The Supreme Court, on February 22, had put a pause on the RIL-FRL deal, also stopping the NCLT from giving its nod till further orders. The matter is to be heard on March 19.
The Future Group says that any more delays will put the company’s plans in jeopardy as regulatory disapproval could force Reliance to walk away from the deal. Moreover, the Women of Big Bazaar SOS, a union of Future Group’s women employees, has sought Prime Minister Narendra Modi’s intervention in protecting their livelihood. In a letter, the union states that women employees of the group will face challenges if Amazon continues to obstruct Future Group-RIL deal.
The union claims to represent over 2.1 lakh women (10,000 direct female employees and another 2 lakh indirect female employees) whose livelihood depend on working for or supplying products to Future Group’s subsidiaries – Big Bazaar and its retail chains 7 Eleven, Brand Factory, Central, Easy Day, fbb, Heritage City and WH Smith. It said that if Amazon is allowed to interfere in the deal, then small-town retail women employees and women of the extended support system will be affected the most.
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Furthermore, the All India Consumer Products Distributors Federation (AICPD) and NGO Prahar, in an open letter, asked Amazon to back off from its bids to block the Reliance-Future Group deal. It said about 6,000 Indian small vendors and suppliers, who have dues worth $800 million pending from Future Group, have become collateral damage in the ongoing tussle between the companies.
Amazon has alleged that the Reliance-Future Group deal breached a contract it had with a subsidiary of Future that barred Future from selling its retail assets with Amazon’s consent. In 2019, the US-based company had bought 49% stake in Future Coupons, with a right to buy into Future Retail in 3 to 5 years. However, in August 2020, Future Group announced the sale of its retail, logistics, warehousing and wholesale business to Mukesh Ambani-led Reliance Retail, which ensued into a legal battle.
