Amazon’s spat with the Future Group over the Future-Reliance deal has turned ugly!
The global e-commerce behemoth, in a recently sent letter to India’s market regulator SEBI aka Securities and Exchange Board of India, has asked for a detailed investigation on Future Retail for insider trading.
For quite some time Amazon India has been pressing SEBI to thoroughly review the acquisition deal made wherein Reliance agreed to buy Future Group’s retail, logistics, and other assets for a whopping $3.4 billion including debt.
Amazon is miffed with Reliance -Future Group deal right from the beginning as the company believes that it’s a clear case of breach of a non-compete contract signed by Future Group in 2019.
Now, in this recent development, the letter which is dated November 8, the Bezos-led tech giant, in a bid to block the deal, alleges that Future Retail disclosed price-sensitive details of a Singapore arbitrator granted injunction Reliance.
Note here that the injunction in question was granted on October 25 after which it was reported that Amazon agreed with the decision reached. However, later that same evening when word went to RIL, in a stock exchange filing, they said they will enforce their rights and will proceed with completing the previously agreed upon deal with Future Group without any delays.
Amazon in its 20-page long letter to SEBI is currently arguing about the same October 25 filing and indicating foul play wherein RIL was made aware of the details of the injunction which “was not a party to the arbitration proceedings”.
The Future Group on October 26, taking note of the injunction filed the previous day, issued a statement to the stock exchange wherein it said that the arbitration would need to be examined and tested by the Indian law before proceeding further.
After this, the fight further escalated when Senior Advocate Gopal Subramanium appeared behalf of Amazon yesterday in the Delhi High Court and said the Future Retail’s lawsuit is doubtful and thus not maintainable.
He also mentioned to the court that the Singapore arbitrator awarded emergency arbitration against Future Retail is very much a valid order. Thus the e-commerce giant has every right to inform all necessary statutory bodies about the same.
According to Amazon, Future Retail chose to participate in the proceedings before the Emergency Arbitration (EA) and also urged that an arbitrator is appointed on their behalf before the passing of an interim order. Therefore, it doesn’t have the right to refute EA’s interim decision now.
How will the case proceed further and what’s to happen to the almost done deal between Future Group and Reliance is something that currently remains unknown.
As of now, everyone is closely watching the situation develop to find out if the Indian courts and regulators will accept the overseas arbitration decisions made as per international laws and rules.
Also, while this entire debacle proceeds with full throttle, one must be reminded that Amazon is currently facing antitrust challenges in India which, if nothing more, adds to the list of their headaches.
Lastly, while RIL, SEBI and Amazon are yet to comment about the situation, a spokesperson from the Future Group has denied the allegations of insider trading. We will keep you updated on all future developments. Until then, stay tuned.