Future Retail in recent times has been surrounded by a dispute over their sale of warehouse and logistics of their retail unit to Reliance. According to e-mails reviewed by Reuters, National Stock Exchange (NSE) had privately warned Future Retail that it risked regulatory action for not making timely market disclosures about efforts by Amazon.com to block a disputed asset sale. Amazon has said that by making the $ 3.4 million asset sale to their rival, Future has breached the contract and some of their pre-existing agreements.
Amazon, the American conglomerate which is a major player in the Indian retail market has accused Future of misleading the public by making incorrect market disclosures. However, the Indian company Future has denied all allegations made against them.
According to reports, these complaints were made by the American conglomerate after October 25th, when it won an injunction from an arbitrator to halt the Future-Amazon deal.
The unreported e-mails show that the stock exchange asked Future to submit more details about the arbitration order. The stock exchange also sought information about the details of the possible impact on financials, lenders, and the Reliance deal.
NSE, on October 27th, had asked Future why the company had not disclosed the commencement of the arbitration proceedings and not shared the impact of the order to which Future replied that they believed a disclosure was not required. The argument was rejected by NSE’s listing compliance division. Emails show that the stock exchange demanded a series of disclosures to be made by the company within hours and also warned the Indian company that If they failed to make the disclosures within the time actions might be initiated.
Communication between the company and NSE was mostly made by Future Retail’s Company Secretary, Virendra Samani on October 30. He answered the queries made by the stock exchange by claiming that it was doing so “in the best interest of all stakeholders”.
Many of the responses were made public on the order of the stock exchange two days later in a six-page exchange filing by Future.
Earlier to this, on October 26th Future had submitted a disclosure. In that, the company attached a media release saying it would ensure its deal with Reliance proceeded unhindered and that it was reviewing the arbitration order.
The legal dispute over the Future-Reliance deal has reached the Delhi High Court. Future has urged the court to stop Amazon from writing letters to the stock exchanges and regulators to block the deal. The court is expected to give its verdict in the coming days.
Amazon has also asked the market regulator to investigate the Future for insider trading. Amazon has said that they believe that Future disclosed price-sensitive details of the arbitration order to Reliance before its exchange filing in October. However, to this Future has said that their communications with Reliance were of “legitimate purposes”.