Amazon requested SEBI to wait for SIAC order before approving Future Group Merger

Amazon requested SEBI to wait for SIAC order before approving Future Group Merger

Amazon.com Inc. (Amazon) requested to the Securities and Exchange Board of India (SEBI) to wait for the final order of Singapore International Arbitration Centre (SIAC), before approving the merger of Future Group Companies, a move that is seen as a precursor to an eventual sale of its assets to Reliance Industries Ltd. (RIL)

RIL signed a deal with Kishore Biyani's of the Future Group Company to buy out the retail, wholesale, logistics, and warehousing businesses from the company. The company approached SEBI for seeking approval on a draft scheme of arrangement for entailing a merger of six group firms into its flagship Future Enterprises Ltd.

The SIAC passed an interim order and prohibited the company from proceeding with the deal with RIL. The reason given by the SIAC for the order was that the consent of Amazon was not taken before signing the deal, which was required according to the agreement signed between Amazon and Future Group Company, as per the said agreement Amazon took a 49% stake in Future Coupons Pvt. Ltd.

Amazon had also written several request letters to SEBI, wherein it urged to stall the RIL-Future deal. Amazon requested SEBI that the Delhi High Court (HC) ruling of SIAC be held as valid under the Arbitration Law of India and therefore, the Future Group Companies amalgamation should be kept on wait till SIAC gives its final verdict.

Amazon mentioned, "The HC has also made it clear that no observations were passed concerning the merits of the interim award. Consequently, all findings contained in the interim award, including the finding that FRL (Future Retail Ltd.) is a necessary and proper party to the arbitration proceedings, continue to be valid." The HC granted Amazon to oppose Future's asset sale to Reliance however it also left the decision on the regulators, including SEBI to decide on the question of validity.

Amazon is aiming to stall Rs. 24,713 Crores of acquisition by the Future Group Company's assets by RIL. There is a possibility that the dispute might drag on for months that would lead to deterioration in Future Group Company's retail assets. Future group is dwindling between a battle of Amazon and RIL for supremacy in India's retail market.

A petition was filed by the Future Group Company before the HC for an interim injunction restraining Amazon from interfering in the RIL-Future deal. It was argued on behalf of Future Retail that the SIAC ruling would not be enforceable in India.

Amazon might either approach a divisional bench of the HC or National Company Law Tribunal (NCLT) for stopping the Future Group Company from amalgamating if SEBI would not act promptly on the requests of Amazon.