Future Retail informs BSE, NSE about Delhi HC order, says Amazon's attempt to control the company violative of FEMA FDI rules
Dec 23, 2020
Mumbai (Maharashtra) [India], December 23 : Future Retail on Wednesday wrote a letter to BSE and NSE regarding Delhi High Court's recent judgement and apprised that Amazon's attempt to control the company is violative of FEMA FDI rules. It also informed stock exchanges that regulators are free to decide Future-Reliance deal as per the law.
The letter informed BSE and NSE that the company (Future Retail) has complied with the disclosure requirement under applicable provisions of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 by submission of the copy of the court order.
The Bench of Justice Mukta Gupta of Delhi High Court gave a judgement on December 21 and held that the statutory authorities or regulators will decide on the approval of the Future-Reliance deal as per the law.
The court had ruled that Future Retail has been able to make out "prima facie case of tortious interference by Amazon" and observed that Amazon's attempt to control Future Retail without government's approval is violative of the Foreign Exchange Management Act (FEMA) and Foreign Direct Investment (FDI) rules.
The Court had said that the Securities and Exchange Board of India (SEBI) and Competition Commission of India (CCI) will decide on Amazon's objections to Future Retail-Reliance Group deal.
The bench left it for regulators to decide if the Rs 24,713 crore Future Retail-Reliance Group deal can be permitted under the law. However, the High Court upheld Future Retail's August 29 board resolution where it announced a deal with Reliance.
On November 20, the CCI had cleared the Future- Reliance deal saying, "Commission approves acquisition of retail, wholesale, logistics and warehousing businesses of Future Group by Reliance Retail Ventures Limited and Reliance Retail and Fashion Lifestyle Limited."
Amazon had claimed before the CCI that the so-called "injunction" of the emergency arbitrator was binding on CCI and that CCI should stop processing the application and should not give its approval.
On August 29 this year, Future Group had announced the sale of its retail and wholesale business to Reliance Retail in a Rs 24,713-crore deal. It had also announced plans to merge key group companies, including Future Retail, Future Lifestyle Fashions, Future Consumer, Future Supply Chains and Future Market Networks into FEL.
Amazon, on the other hand, has argued that a 2019 pact it signed with Future prevented the Indian company from selling its retail assets to certain parties. It had also won an interim award against the transaction between RIL and the Future group after a Singapore-based single judge arbitration panel put the transaction on hold.
The plea filed by Future Retail Ltd had sought to restrain Amazon from interfering in the Reliance Retail-Future deal on the basis of an interim order passed by the Singapore International Arbitration Centre (SIAC). Amazon had taken Future Retail into an emergency arbitration over an alleged violation of the contract.
