Amazon has approached the independent directors of Future Retail Ltd (FRL), and written to them that any sale of small-format stores by the company without the approval of the US multinational tech company would violate injunctions, and asserted its willingness to assist the ‘ almost on the brink of insolvency’ retailer in addressing financial concerns.
In the letter dated January 19, 2022, Amazon said it has come to its notice from several media sources that FRL is willing to offload 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 obtained by PTI, said.
Amazon emphasized it is ready to assist FRL in exploring effective solutions.
“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 of/alienate/encumber FRL’s Retail Assets without Amazon’s consent,” it said.
Future and Amazon have been embroiled in a bitter legal battle since the US e-commerce giant dragged Future Group to arbitration at the Singapore International Arbitration Centre (SIAC) in October 2020, claiming that FRL had breached their contract by entering into a slump sale agreement with Mukesh Ambani’s Reliance Retail for Rs 24,713 crore.
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FRL claimed earlier this month that it had defaulted its pay-off to banks and lenders Rs3,494.56 crore because it could not sell its assets owing to its long legal battle with Amazon, which had impacted its monetization ambitions.
Notably, in December, the Competition Commission of India (CCI) suspended 2019 approved Amazon’s deal to acquire a 49 per cent stake in Future Coupons Pvt Ltd (FCPL), FRL’s promoter. The antitrust watchdog had also slapped a penalty of ₹202 crore on the e-commerce major.
Following that, Amazon approached National Company Law Appellate Tribunal (NCLAT) challenging the CCI order.
The next hearing of NCLAT on this matter is on February 2.
In the past also, Amazon has sent several written notes to independent directors of FRL regarding the ongoing tussle.
Amazon, in the latest letter, said it has continuously emphasized its stance 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 ₹7,000 crore in FRL,” it added.