Amazon to pay penalty of Rs. 200 crore, NCLAT upholds decision of CCI.
CCI, for the first time suspends an approval which was granted over 2 years back.
By : Legal Era
Update: 2022-06-13 08:15 GMT
Amazon to pay penalty of Rs. 200 crore, NCLAT upholds decision of CCI.
CCI, for the first time suspends an approval which was granted over 2 years back.
The National Company Law Appellate Tribunal (NCLAT) upheld the decision of the Competition Commission of India (CCI) which imposed a penalty of Rs. 200 crores on Amazon for obtaining approvals by suppressing crucial facts about their acquisition of 49 percent stakes in Future Coupons Private Limited (FCPL).
CCI, in its order dated vide 17 December 2021, found Amazon guilty of not complying with Section 6(2) of the Competition Act, 2002 read with regulation 9(4) of the Competition Commission of India (Procedure in regard to the transaction of business relating to combinations) Regulations, 2011. It failed to notify about the Future Retail Limited Shareholders Agreement (FRL SHA) as part of the combination between the parties.
Additionally, the CCI kept at abeyance the deal between Amazon and FCPL until Amazon gives notice to CCI under Form II of the Competition Act within a period of 60 (sixty) days.
It was noted that Amazon had only identified three transactions of the combination, i.e.
1. The issue of Nine Million One Hundred and Eighty-Three Thousand Seven Hundred and Fifty-Four (9,183,754) Class A voting equity shares of FCPL to Future Coupons Resources Private Limited (FCRPL). Prior to, and immediately after post-issuance of such equity shares, FCPL will be a wholly-owned subsidiary of FCRPL; and
2. The transfer of Thirteen Million Six Hundred and Sixty-Six Thousand Two Hundred and Eighty-Seven (13,666,287) shares of FRL held by FCRPL (representing Two decimal Five Two Percent (2.52%) of the issued, subscribed, and paid-up equity share capital of Future Retail Limited (FRL), on a Fully Diluted Basis) to FCPL; and
3. The acquisition of the Subscription Shares representing Forty-Nine percent (49%) of the total issued, subscribed, and paid-up equity share capital of FCPL (on a Fully Diluted Basis) by Amazon, by way of a preferential allotment.
However, the FRL SHA was not notified as part of the combination despite it being a part of the deal between the parties.
NCLAT, as result, upheld the decision of CCI.