As Reuters reported Wednesday (March 2), the retail giant says it plans to initiate criminal court proceedings against the department store chain for allowing the transfer of assets to a rival despite a court ruling blocking such moves.
Amazon aims to take the matter before a New Delhi court and ask a judge to order an investigation into the matter, a source close to the matter told Reuters. Other sources said the lawsuit could be filed as early as this week.
Amazon and Future — the second-largest retailer in India — have been engaged in a legal standoff for more than a year, a battle that’s held up Future’s $3.4 billion asset sale to Reliance Industries, as Amazon argues Future violated non-compete contractual terms.
Future has countered it couldn’t pay the 35 billion rupees ($470 million) it owes its lenders as the legal battle with Amazon has blocked it from selling some of its smaller stores.
According to Reuters, Reliance has begun taking over and rebranding about 500 Future stores. The company had already transferred leases of some of Future’s flagship supermarkets to its name, allowing Future to keep operating them. Now, Reliance has begun to take possession of those stores following Future’s failure to make rent, sources told the news outlet.
In the criminal proceeding, Amazon will allege Future Retail concealed information during legal proceedings and transferred leases to Reliance despite an order from an arbitrator blocking the transfer or disposal of assets.
“This is going to be Amazon’s last attempt (to stop the deal),” said one of the sources said.
Lat month, a group of Future Retail’s lenders told India’s Supreme Court that the chain’s assets should be auctioned off to cover missed payments. The lenders said they’ve begun classifying loans to the company as non-performing and would need to make combined provisions of 80 billion to 90 billion rupees (or $1.1 billion to $1.2 billion) due to the chain’s non-payment.