Amazon, according to Reuters, sent a letter to the Securities & Exchange Board of India last week arguing that Future Retail was issuing misleading public statements about the proposed transaction, saying it was complying with contractual obligations. Securities regulators therefore should block the deal, Amazon reportedly argued in the letter.
“Such a disclosure is against public interest, misleads public shareholders … as well as perpetuates a fraud…,” Amazon wrote, according to Reuters.
Reuters said spokespeople for Future Group and Amazon declined comment, and a spokesman for Reliance Industries could not be reached for comment.
The filing is the latest round in a fight between Amazon and Future Retail that began around the time the sale of assets to Reliance was announced earlier this year.
At the center of the issue is whether Future Retail has broken the terms of a 2019 deal with Amazon through which the U.S.-based online giant invested $200 million in the Indian company. Amazon reportedly maintains that as part of taking the investment, Future Retail agreed it would not sell assets to certain entities — among them rising online power Reliance Industries.
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When Future Retail nevertheless pursued what would become a $3.4 billion transaction with Reliance, Amazon took the matter to arbitration.
A Singaporean arbitrator agreed upon by Amazon and Future Group last week sided with Amazon, stating that companies need to honor their contracts. Indian legal experts cited by Reuters said the out-of-country arbitrator’s award may not be enforceable in India.
Also, on Sunday (Nov. 1), Future Retail said in a regulatory filing the arbitrator’s order isn’t binding. Future Retail’s Sunday filing with regulators states: “FRL is also in the process of taking appropriate legal action to protect its rights,” Reuters reported.
