The Indian Bombay Stock Exchange (BSE) would consult with the market regulator Securities and Exchange Board of India (SEBI) about the deal between Reliance Industries and Future Group after Amazon had made an objection, according to a Reuters report. The Bombay Stock Exchange would also seek clarifications from both Future Retail and Reliance Industries regarding the deal between them. Reliance Industries had reportedly acquired the retail business of the Future Group in a deal amounting to an estimated $ 3.4 billion.
Amazon won an injunction from a Singapore arbitrator to halt Future’s deal to sell retail assets to Reliance on October 25, 2020. The US-based conglomerate who also has a retail business in India argued that the Future Group had breached a prior contract that they had with Amazon by selling their retail assets to Reliance who is a competitor to Amazon.
Both Reliance Industries and Future Group replied to the decision by claiming that they want to complete the deal “without any delay”. Reuters also reports citing two sources who claim that Amazon has written to the Bombay Stock Exchange, the National Stock Exchange, and the regulatory board SEBI asking them to put the deal on hold due to the arbitration order.
Reuters also cited a BSE source who said that the BSE will consult SEBI about its stance on the deal. BSE would also reportedly seek clarification from both the Indian firms involved in the deal.
The main dispute arose as the Future Group in August of this year took their decision to sell its retail, wholesale, logistics, and some other businesses to Reliance for $3.38 billion, including debt. Amazon, on the other hand, claims that they had made a deal with the Future Group in 2019 that had a clause in it which stated that the Indian group couldn’t sell its retail assets to anyone on a “restricted persons” list including any firms from Reliance chief Mukesh Ambani’s group.
Amazon had bought a 49 percent stake in one of Future’s unlisted firms, Future Coupons Ltd, with the right to buy into flagship Future Retail after a period between three and 10 years. Future Coupons holds a 7.3 percent stake in Future Retail.
According to another source who was also mentioned in the same Reuters report, the US-based online e-commerce giant has shared a copy of the Singapore arbitrator’s interim order with SEBI and the two stock exchanges and expect them to step in to stop the deal from going through.
Reliance has the largest retail business in the country consisting of 12,000 stores in nearly 7,000 towns, with 640 million footfalls across core categories of grocery, consumer electronics, and apparel. Reliance Retail reported FY20 revenue to be ₹ 1.63 lakh crore.
As the interim order went against Reliance, RRVL said in a statement to moneycontrol.com, “RRVL has entered into the transaction for the acquisition of assets and business of Future Retail under proper legal advice and the rights and obligations are fully enforceable under Indian Law. RRVL intends to enforce its rights and complete the transaction in terms of the scheme and agreement with Future group without any delay.”
According to reports, a three-member arbitration panel would resolve the dispute within 90 days. Among the three-member groups, Amazon and Future would appoint one representative each and the other would act as a neutral umpire.
During the arbitration hearing in the Singapore court, the Amazon team was represented by a team of Gopal Subramanium, Gourab Banerji, Amit Sibal, and Alvin Yeo. On the other hand, Future Retail’s team was represented by advocate Harish Salve.