In the matter of Future Group – Reliance Deal, Amazon, the popular US business giant, has sent another letter to the Securities and Exchange Board of India (SEBI), reporting Future Retail for insider trading thereby calling for an investigation
Future group denied the allegations leveled against them saying the claims were “Amazon’s ill-motivated attempt to throw everything at the situation to stultify the transaction.”
This is not the first time Amazon would make a request to SEBI about Future group to review Reliance August deal to buy logistics, retail, and other assets from Future group for Rs.25,300 crores including debts.
In their defense, Amazon claimed they had an agreement with Future group in 2019 which didn’t allow the sale of retail assets from being purchased by some parties including Reliance. Asia’s richest man, Mukesh Ambani is the leader of Reliance group.
According to the content of the letter which was sent to SEBI on November 8, it was revealed that Fortune Retail divulged some secret information to Reliance about an injunction granted by an arbitrator in Singapore to make the deal unsuccessful.
On Sunday, October 5, the injunction was granted and the information spread to the members of the public by the media. Amazon was pleased with the decision.
During a stock exchange filing, Reliance said it had received information about the arbitration order and won’t hesitate to use its authority to finish its deal with Future group immediately.
According to the content of the letter sent by Amazon on October 25, the company made it known that Reliance wasn’t a part of the arbitration process. It further said, they shouldn’t have access to private information, except it was leaked by Future Retail or their promoters.
Contrary to the claims by Amazon, a member of Future group, while making a statement to Reuter, said there is no iota of truth as regards the allegations made against the company in the letter. He continued that the news of the injunction had become public knowledge from Sunday. Amazon refused to clear the air about the content of their letter while Reliance and SEBI did not also respond to requests for comments concerning the issue.
On the 26th of October, Future Retail stated the stock exchange which said it was still accessing the arbitration order and that the order would be examined by Indian law. The group had previously disagreed with Amazon’s agreement of last year involved them.
Future group, which controls several food stores and supermarkets in India, said they were affected by the COVID-19 pandemic just like every other small and large businesses. According to their claims, they made the deal to sell assets to Reliance because stakeholders had to be protected during this period.
Recently, Future Retail has approached a New Delhi court to put a restraining order on Amazon thereby stopping them from blocking their chances with Reliance.
As of now, no precise decision has been by Indian Courts about the company that will be supported, whether Amazon or Future Retail.