Amazon was accused of attempting to “destroy competition” by contesting, the Future Group-Reliance Retail deal, Future Retail (FRL) on Thursday told the Delhi High Court. “The e-commerce firm was misrepresenting its legal rights and behaving like ‘East India Company,’ it added.
Senior counsel Harish Salve, appearing for Future Retail, told Justice Mukhta Gupta that Amazon is misrepresenting to the world through an agreement that FRL “can’t restructure its company, save jobs, and its creditors’ worth Rs 1,800 crore can’t be protected. This is wrong.”
According to the Companies Act 2013, entities with less than 10% shareholding cannot interfere in the scheme of the arrangement, he said, adding that a “passive holding of less than 10% does not entitle one to object to such schemes”. He further said that “Amazon has no rights over FRL and cannot control its board. Amazon doesn’t have a direct stake in FRL and holds 49% in Future Coupons which in turn holds 9.8% in FRL. A foreign investor can’t acquire a controlling stake in the Indian multi-brand retail as per law. Over 10% investment by Amazon would have violated FEMA. When Amazon doesn’t have a controlling stake, how can it restrain FCPL?” Salve argued, adding that “FRL is a public listed company, Amazon can’t stop its transactions. Amazon is acting like the East India Company of 21st Century and is falsely claiming that it has taken charge over us”.
The COVID-19 pandemic resulted in huge losses for the Future Group amounting to in Rs 10,000 crore plus payments to financial institutions and lenders, vendors and suppliers, and to landlords Amazon engaged in discussions with Future group, but could not propose any viable solution to the problem. Future Group is also engaged with Reliance Retail for potential partnerships, which were known to Amazon.
The Future Group and Amazon have initiated this legal battle after the US-based company took FRL into an emergency arbitration over alleged breach of contract. The SIAC on October 25 passed an interim order supporting Amazon barring FRL from taking any step to dispose of, or encumber its assets, or issuing any securities to secure any funding from a restricted party. Subsequently, Amazon approached Sebi, stock exchanges and CCI, urging them to take into consideration the Singapore arbitrator’s interim decision as it is a binding order.