Amazon knocks on Sebi doors again over Future-RIL deal

E-commerce major Amazon has written to Sebi yet again, apprising the market regulator of the formation of the arbitration tribunal at SIAC while urging it to suspend the review of the Rs 24,713 crore Future-RIL deal.

It has also filed an appeal with the division bench of the Delhi high court against the December 21 order of the single member bench, according to sources.

On December 21, a single member bench of the Delhi HC had rejected Future Group's plea to restrain Amazon from writing to regulatory authorities about the SIAC (Singapore International Arbitration Centre) arbitral order but gave a go-ahead to the regulators to decide over the deal.

The court had also made several observations indicating that Amazon's attempt to control Future Retail through a conflation of agreements Amazon has with an unlisted unit of the Indian company will be violative of the FEMA FDI rules.

Emails sent to Amazon and Future group seeking response on these matters did not elicit a response.

In its letter dated January 5 -- a copy of which was seen by PTI -- Amazon informed Sebi that the ‘Singapore International Arbitration Centre (SIAC) has constituted the arbitral tribunal in the Arbitration Proceedings initiated by Amazon against inter alia FRL, Mr Kishore Biyani and Mr Rakesh Biyani’.

Amazon also requested Sebi to suspend ‘review of the Impugned Transaction as well as the scheme involving the Impugned Transaction, and not granting any no-objection’ for the Future-RIL deal.

The letter also urged the market regulator to direct the Indian Stock Exchanges not to issue any no-objection/approval letter to Future Retail Ltd (FRL).

A three-member tribunal consisting Singaporean barrister Michael Hwang has been formed at SIAC. The other two members of the tribunal are Albert van den Berg and Jan Paulsson.

As per SIAC rules, the interim award passed by the Emergency Arbitrator (EA) ‘automatically extended for the duration of the Arbitration Proceedings’ unless it is reconsidered/modified/vacated by the arbitral tribunal itself, Amazon further said in its letter addressed to Sebi Chairman Ajay Tyagi.

Amazon has written a series of letters to regulators and the bourses, starting with its complaint on October 3. This is the sixth instance of the e-commerce giant writing to Sebi on the matter.

Amazon had dragged Future group to arbitration at SIAC after an indebted Kishore Biyani group firm signed a pact to sell retail, wholesale, logistics and warehousing units to billionaire Mukesh Ambani's Reliance in August last year in a Rs 24,713 crore deal.

Amazon's argument is that Future violated the contract by entering into the deal with rival Reliance.

In October, SIAC  had passed an interim award in favour of Amazon with a single-judge bench of V K Rajah 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.

In its most recent letter, Amazon reiterated that FRL continues to be ‘expressly injuncted and restrained’ by the interim award and is barred from taking any steps in furtherance of the transaction, including filing applications before any regulators or agencies including Sebi in India.

In the ongoing tussle, Future claims that Amazon had failed to provide any help to the debt-laden Future group that suffered a massive setback during the Covid-induced lockdown.

The US e-commerce major, on the other hand, contends that there were ongoing discussions on multiple options with partners and with the promoters of Future.

In August 2019, Amazon had agreed to purchase 49 per cent of one of Future's unlisted firms -- Future Coupons Ltd -- with the right to buy into the flagship, FRL after a period of three to ten years. Future Coupons holds 7.3 per cent equity in BSE-listed FRL -- that operates popular supermarket and hypermarket chains such as Big Bazaar -- through convertible warrants.