Future Retail rejects Amazon's opposition over shareholders' meeting on sale of assets

Kishore Biyani-led Future Retail Ltd (FRL) on Friday said the meetings of its shareholders and creditors next week to consider and approve the sale of its retail assets to billionaire Mukesh Ambani's Reliance Retail are in compliance with the directions issued by the NCLT.

Earlier this week, e-commerce major Amazon, which is contesting the Rs 24,713 crore deal, had said the meetings were "illegal".

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However, issuing a clarification, FRL in a regulatory update said the meetings have been convened in compliance with the directions given by the National Company Law Tribunal (NCLT) in its order passed on February 28, 2022 to consider and approve the Scheme of Arrangement filed by various entities which are part of the deal.

"The said order has been issued by the NCLT, after considering all the facts and information submitted by the parties and specific objections filed by Amazon.Com NV Investment Holdings LLC vide an intervening application and the order dated 15th February 2022 issued by Supreme Court on the same subject matter," said FRL.

Regarding voting on resolutions by shareholders, FRL said if any one of them is restricted due to any contractual obligation, then it would not affect the proceedings of the meetings convened.

Future has convened a shareholders' meeting on April 20 and that of creditors on April 21 to seek their approval for the proposed Rs 24,713-crore deal with Reliance.
In a 16-page letter to Kishore Biyani and other promoters on April 12, the US e-commerce giant said such meetings are illegal and would not only breach 2019 agreements when Amazon made investments into

FRL's promoter firm but also violate a Singapore arbitral tribunal's injunction on the sale of retail assets to Reliance.

The letter, signed by a representative of Amazon.Com NV Investment Holdings LLC, asked the Biyani group to strictly abide by the injunctions granted by the Emergency Arbitrator and "ensure that no further steps are taken to proceed" with the transaction.

This week, public sector lender Bank of India moved the NCLT seeking initiation of insolvency proceedings against Future Retail Ltd and a moratorium over the assets of the debt-ridden firm.

Bank of India (BOI), the lead banker of a consortium of banks that lent money to Future Retail Ltd (FRL), also urged the insolvency tribunal to appoint Vijay Kumar V Iyer as the interim professional of the company.

Amazon is opposed to Reliance's August 2020 offer to buy Future Retail's stores and warehouses for Rs 24,713 crore on grounds that the deal violated its 2019 agreement through which it acquired a 49 per cent stake in FCPL, the promoter entity of Future Retail, for about Rs 1,500 crore.

It has dragged Future to arbitration and courts to block the Reliance deal.

Reliance in late February quietly began taking over the rental leases of hundreds of stores once run by Future Retail and Future Lifestyle Fashions Ltd amid lawsuits and arbitration across India and Singapore.

FRL is part of the Rs 24,713 crore deal announced by Future Group in August 2020, under which it is to sell 19 companies operating in retail, wholesale, logistics and warehousing segments to Reliance Retail Ventures Ltd (RRVL).

All 19 companies would be consolidated into one entity -- Future Enterprises Ltd -- and then transferred to RRVL under the proposed deal.