Amazon wins the legal battle

|Business Insider|

E-commerce giant Amazon has won the legal battle against Future Retail, meaning that the retail giant’s sell-off worth ₹24,000 crore to Reliance Retail is now off the table.

The Supreme Court of India on Friday, August 6, upheld the emergency award given to Amazon by the Singapore International Arbitration Centre (SIAC) last year.

The legal battle between Amazon and Future Retail dates back to August 2020, after Mukesh Ambani-led Reliance Retail agreed to buy Future Group’s retail, wholesale and warehousing assets for ₹24,713 crore.

Amazon, which held about 3% stake in Future Retail through its 49% shareholding in Future Coupon, objected to the deal. The e-commerce giant had mentioned that as per their deal, Future Group was barred from selling any of their assets to several companies, including Reliance.

The US-based e-commerce titan also contended that it was left out of the loop while the deal was being cracked.

Since the Supreme Court’s verdict, Future Retail’s stock price has dropped 9.94% on August 6 as of 11:16 a.m. Its shares were trading at ₹52.55 as of 11:16 a.m. Meanwhile, Reliance Industries’ shares were down 1.9%.

Earlier this year, Future Group’s chief executive Kishore Biyani has claimed that the Reliance acquisition deal was a “saviour for them, their employees and shareholders.” He noted that Future Group had reached out to Amazon eight times in 2020, seeking financial help. However, the e-commerce giant never offered any support.

“As part of the agreement, they could have provided us funds through affiliates or financial institutions by taking over loans from existing lenders, but they never did despite the agreement clause and our request,” Biyani had told the Economic Times.

He also emphasised that Amazon was aware about the Future-Reliance deal.

(Except for the headline and the pictorial description, this story has not been edited by THE DEN staff and is published from a syndicated feed.)