The notice was issued in the wake of a complaint filed by Future Group, which is locked in a bitter legal battle with Amazon over the proposed settlement of Rs 24,713 crore with the former. Dependency Industries.
“We received a Notice of Proof of Cause from the ICC based on the complaint filed by Future as part of an ongoing dispute. We are committed to complying with the laws of India and will provide full cooperation to ICC in this matter. on Thursday an Amazon spokesperson.
The spokesperson expressed confidence that the company will be able to address the ICC’s concerns.
“However, as our dispute with Future is pending litigation, and we are also bound by confidentiality obligations, we are unable to comment on the merits or content of the allegations at this stage …,” the spokesperson said.
There was no immediate comment from Future Group.
On Thursday, Future Group submitted a copy of CCI’s notice to Amazon to the Supreme Court, which is hearing a guilty plea filed by Amazon related to the ongoing dispute.
In November 2019, CCI had given its approval for Amazon to acquire a 49 percent stake in Future Coupons Pvt Ltd (FCL). FCL is a shareholder of Future retail Limited.
CCI had sent the notice to Amazon on June 4. The notice refers to submissions from Amazon while seeking a go-ahead for the FCL deal, the sources said.
Agreements that exceed a certain threshold require CCI approval. The watchdog has extensive powers, including to revoke your authorization for any transaction if it is ever discovered that the information provided by the acquirer was incorrect.
In the notice, CCI has alleged that Amazon hid its strategic interest in Future Retail and that such interest was not previously disclosed to the regulator.
In addition to the nondisclosure, false and incorrect representations have also been made in connection with the 2019 transaction, according to the notice, a copy of which was seen by PTI.
“… this demonstration cause notice is being issued to you to explain, in writing, why it will not be determined that you have not given notice regarding FRL SHA (Future Retail Ltd Stock Holding Agreement) and provided information false and incorrect information and hidden / suppressed material facts, in contravention of said provisions of the (Competition) Law, “he said.
In August 2019, Amazon agreed to buy 49 percent of one of Future’s unlisted companies, FCL (which owns 7.3 percent of the shares of Future Retail Ltd, which is listed on the BSE through convertible warrants. ), entitled to purchase from the Future Retail flagship after a period of three to ten years.
One year later, Reliance Retail Ventures Ltd had signed a deal with Future Group to acquire the retail and wholesale business and the logistics and warehousing business for Rs 24,713 crore.
Amazon dragged Future Group to arbitration at the Singapore International Arbitration Center (SIAC), arguing that its 2019 agreement prevents the sale of Future Retail Ltd’s business to rivals. In October last year, the Emergency Arbitrator (EA) approved an interim award in favor of the US e-commerce company.
The EA prohibited Future Retail from taking any steps to dispose of or encumber its assets or issue securities to secure any funding from a restricted party. Amazon and Future Group have also filed litigation in Indian courts, including the Supreme Court, on the issue.
SIAC has concluded its hearing on Amazon’s guilty plea in the matter and is likely to deliver a sentence in a month.
Initially, the Future Group-Reliance deal was expected to close in late March. However, in April, Reliance Industries said it was extending the schedule for the “Extended Shutdown Date” from March 31, 2021 to September 30, 2021.
The agreement has received authorization from regulators such as CCI, Sebi and exchanges, and the arrangement scheme is now awaiting approval from the NCLT and shareholders.