Amazon slams transfer of Future store to Reliance as ‘fraud’
A few days after the group led by billionaire Mukesh Ambani took over some of the stores of Future Group, whose lease had expired due to non-payment of rent, Amazon.com Inc on Tuesday accused the two of “fraud” and a declared such a transfer “unthoughtful”. will be subject to legal action.
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Amazon has challenged the Rs 24,713 crore sale of Future Group’s retail assets to Ambani’s Reliance Group, first announced in August 2020, and the case is currently before the Supreme Court.
Reliance signed rental agreements last month with landlords who have not received rent for months for stores built on their properties by Future Group. Initially it sublet the properties to Future Group for operation, but this month terminated those sublets and took over 947 of those stores.
In advertisements in major newspapers titled “Public Notice”, Amazon said: “These actions have been carried out in a clandestine manner by defrauding Indian Constitutional Courts, Arbitral Tribunal and Indian Statutory Authorities/Agencies”.
He accused Future Retail Ltd and its promoters of making a false statement before the Supreme Court that the retail assets would continue to vest in FRL until the Reliance deal was approved by the court in insolvency – the National Company Law Tribunal (NCLT).
“These misrepresentations were knowingly made as FRL was about to allegedly authorize the handover of retail assets to Mukesh Dhirubhai Ambani (MDA) Group.” Amazon’s public outcry came even though on March 3 it offered to hold talks to resolve the dispute.
In stock market filings this month, Future said it could not pay rent at many outlets given its difficult financial situation and that Reliance, which had taken over many of its leases, had issued notices of termination.
“It has now emerged that FRL and its promoters attempted to remove the bedrock of the dispute by allegedly transferring and disposing of FRL’s retail assets, including retail stores in favor of the MDA Group,” Amazon said in the notice. public.
He went on to warn everyone involved against such a transfer.
“Amazon hereby notifies all affected persons that any attempt by the promoters of Future Group to transfer, assign or dispose of any of its retail assets is in breach of the arbitral tribunal, acting by order of the Indian court and any party assisting in such fraudulent acts and actions in absentia will be subject to civil and criminal consequences under the law,” he said.
Future – which has more than 1,700 outlets, including popular Big Bazaar stores – was unable to make rental payments for the bulk of its outlets.
With landlords insisting on payouts or store closures, Reliance transferred the leases of some stores to its name and sublet them to Future to operate the stores. It also offered jobs to all 30,000 employees of Future Retail.
Also, the majority of inventory for these stores was supplied by Reliance Jiomart, as a cash-strapped FRL could not pay dues to existing vendors.
Earlier this month, Future Group companies, indebted and led by Kishore Biyani, said they had received lease termination notices for 835 Future Retail stores and 112 Future Lifestyle stores.
Amazon has argued that Future breached the terms of a 2019 agreement the companies signed when the US e-commerce giant invested $200 million in a unit of Future Group. Amazon’s position was backed by a Singapore arbitrator.
Future in January challenged its lenders in the Supreme Court to avoid facing insolvency proceedings over missing bank payments, citing its dispute with Amazon.
In August 2020, the loss-making retail giant offered to sell its retail, wholesale and logistics arms which included businesses including Fashion at Big Bazaar, Koryo, Foodhall and Easyday, to Reliance for Rs 24 713 crores.
In the notice, Amazon said the award of the arbitral tribunal, which it approached to block the Reliance-Future deal, prevented the Biyani-led company and its promoters from directly or indirectly taking steps to transfer/ alienate/alienate/encumber the retail trade. assets in any way without the prior written consent of Amazon.
“The above-mentioned orders made in the arbitration continue to stand and are in effect to this day,” he added.