Does CCI Verdict On Reliance Future Group Deal Hints Who Will Have The Last Laugh?

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Biyani’s Future Group, Ambani’s RIL, and Bezos’ Amazon have been in a three-way dispute for the past month. This dispute was sparked in October when in a response to a deal between RIL and Future Group, Amazon sought the intervention of the Singapore International Arbitration Centre (SIAC) on the grounds that the deal between RIL and Future Group went against Amazon’s investment agreement with the latter.

The SIAC put forward a ruling in favour of Amazon, instructing Future Group to halt its deal with Reliance. At the same time, Amazon also approached the Competition Commission of India (CCI) and the Security and Exchanges Board of India (SEBI) to look into the matter and prevent the deal.

The CCI’s verdict on the issue was delivered on Thursday in a tweet wherein the committee approved the deal.


CCI is yet to make announcements regarding the specifics of their ruling and are expected to do so soon.

The concerned ruling is an asset to RIL and Future Group and a setback to Amazon. However, the CCI is only a body that determines whether an investment agreement between two parties is fair. In other words, it does not have any statutory power to “approve” transactions as such. Nonetheless, the verdict squashes any doubts about the legality of the transaction, at least by Indian standards.

The M&A experts believe that the verdict of CCI on Reliance Future Group has all the potential of influencing the ongoing dispute and stand of parties involved. The far-reaching impact of the verdict has all the potential of bringing Amazon, Reliance and Future Group to negotiation table once again for an out-of-court settlement.

Future Group Takes Amazon to Court

Following October’s fiasco with the SIAC, Future Group filed a lawsuit against Amazon in the Delhi High Court in early November. According to Future Group, Amazon is misusing the SIAC’s interim order to interfere with the former’s deal with RIL by approaching Indian authorities.

Harish Salve, the advocate for Future Group, has argued that the SIAC’s order is not binding by virtue of being an international entity rather than an Indian one. Future Group has asserted their deal’s congruence with Indian regulations from the start.


Furthermore, Amazon’s objection is rooted in the claim that the deal goes against the non-compete contract between itself and Future Group, which bars the latter from making large equity sales to major Amazon competitors in India, including Reliance. However, Future Group asserts that Amazon does not have any voting rights in the company and its operations at the moment, with stakes of less than 5%.

The next hearing on the matter will be held on Monday next week.

Amazon Pushing its Luck

The total assets of the Future Group and its subsidiaries currently amount to Rs. 30,000 crore. In contrast, Amazon invested Rs. 1,431 crore in Future Coupons, an unlisted subsidiary of Future Group, in 2019.

On the other hand, Reliance Retail Ventures Ltd., Reliance’s retail subsidiary, and India’s largest retail unit is set to invest Rs. 24,713 crores in at least 7 Future Group subsidiaries, none of which include Future Coupons.

Future Group had encountered a dip in profits earlier this year which was only exacerbated by the pandemic. The company has been struggling to pay employees these past few months and has incurred massive debts from banks.

According to Future Group, these problems were discussed with Amazon, who did not offer any workable solutions for the same. In such a situation, efforts to further prevent the deal between Reliance and Future Group is foul-play rooted in commercial interests on Amazon’s part.

Though CCI is not the ultimate body to pass the final verdict, it may have some influence on the final outcome of the three-party dispute. But it seems like a lot of actions are yet to take place. It would be interesting to see who will have the last laugh!


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