The independent administrator of Future Retail Ltd (FRL) has dismissed Amazon’s allegations that Amazon facilitated a fraudulent scheme to transfer 835 stores to Reliance Retail, calling them “bogus” and said the retail major electronics was attempting to create a narrative by using the company “as a pawn” to wage its battle against billionaire Mukesh Ambani.
They said that due to the “cumulative effect” of Amazon’s misconduct, FRL’s lenders rejected the ₹24,713 crore deal with Reliance Retail and the company’s account was declared NPA because it had failed to monetize the assets by selling the small-format stores to repay some of the monies owed to the banks.
Slamming Amazon for making “false statements” and submitting “false documents” before the fair-trade regulator Competition Commission of India (CCI), which had in December 2021 issued its order approving major e-commerce approval for the investment in the Future Group company on hold, the independent directors said preaching governance to them was akin to “a demon preaching vedas”.
“…it is not for a company like yours to preach governance to us.
The independent administrators also alleged that Amazon was trying to acquire key FRL assets on the cheap for ₹7,000 crore through Samara.
“When Reliance offered ₹25,000 crore for the scheme, Amazon spared no effort to escalate this deal, and eventually succeeded on the grounds that the financial institutions blatantly refused to sanction the scheme considering the uncertainty that weighed on him,” the independent directors said in a letter dated May 28.
After destroying FRL’s prospects, Amazon has now started making another round of false claims, they alleged.
The independent administrators alleged that Amazon “illegally” dragged FRL into its dispute with Future Coupons Private Limited (FCPL) and obtained an injunction in October 2020 from SIAC preventing FRL from implementing the agreement.
This made FRL’s store owners worried about the prospect of recovering their pending dues, as the company was facing financial difficulties as early as March 2020.
“Landlords are free to manage their properties as they see fit and they have leased these business premises to Reliance. FRL could not have prevented the leasing of business premises by these individual owners to Reliance,” he said. he declares.
As the plan of arrangement for the sale and transfer of the Future Group retail assets was pending implementation, Reliance permitted FRL to continue operations from these premises by entering into license agreements subject to the payment of license fees.
However, after the deal was canceled and the company faced insolvency due to Amazon’s action, Reliance in February and March 2022 issued termination letters and refused FRL’s access to the Store’s premises exercising its rights under the Contract.
“We reaffirm once again that no retail stores were divested by FRL to Reliance and that there was no scheme to divest stores to Reliance,” they said.
Earlier, Amazon in a letter to FRL’s independent trustees this month accused them of facilitating a ‘fraudulent scheme’ to transfer 835 stores to billionaire Mukesh Ambani’s Reliance Group, claiming the story of the transfer was due to the non-payment of huge unpaid rent was a “sham” as the retailer had stated a month before such a move that the unpaid rent was only ₹250 crore.
The US retailer wrote on May 19 to FRL’s independent trustees that the company had in a meeting with major lending banks on January 1, 2022 “categorically admitted that the unpaid rental fee was only ₹250 crore FRL further stated that it voluntarily retained the amount”.
“Amazingly, FRL had managed to do this without halting any of its operations or divesting its stores,” he wrote.
“Therefore, any narrative that there has been an alleged transfer due to the non-payment of huge unpaid rent for no less than 835 retail stores, that too as of February 26, 2022, is nothing other than a sham and a false narrative to regulators, creditors, shareholders and the Courts.”
In response, FRL’s independent directors said that Amazon was neither a shareholder nor a creditor of FRL and that, on the contrary, it was responsible for FRL’s current situation.
“Having destroyed all prospects of reviving the FRL, it is remarkable that Amazon wrote a letter like this,” they said, adding that the letter is a regurgitation of baseless allegations made by Amazon before various authorities, including in ongoing proceedings before the Delhi High Court.
“It is regrettable that Amazon is trying to pursue the same frivolous and unsupportable allegations in different forums and issuing defamatory and slanderous public statements in this regard, even though these cases are currently pending in the Delhi High Court under a lawsuit brought by Amazon itself. This is yet another demonstration of Amazon’s disregard for Indian law and indifference to the rule of law in India,” they said.
Future and Amazon were locked in a bitter legal battle after the US e-commerce giant dragged Future Group to arbitration at the Singapore International Arbitration Center (SIAC) in October 2020, arguing that FRL breached their contract by entering into a agreement to sell its assets to Reliance Retail on a sell-down basis for ₹24,713 crore.
May 30, 2022