FRL Independent Directors Ask CCI to Revoke 2019 Amazon Deal

FRL Independent Directors Ask CCI to Revoke 2019 Amazon Deal

Independent directors of Future Retail Ltd (FRL) alleged that hid facts from the regulator. The group has again asked the Competition Commission of India (CCI) to revoke its approval of a 2019 deal between a group company and the U.S. retail firm.

The directors have alleged that the e-commerce company obtained CCI approval for its ₹1,431 crore investment in Future Coupons Pvt. Ltd (FCPL) for a 49% stake. That was by making “deliberate misrepresentations” and “actively misleading” the antitrust regulator.

According to the letter submitted by the FRL independent directors to CCI, the directors alleged that representations made by Amazon to CCI were “contradictory” to such correspondences. The letter was uploaded on the exchanges on Sunday.

The legal battle between Amazon and the Future Group concerns the sale of the group’s retail and wholesale assets to Reliance Industries Ltd’s (RIL’s) retail unit for ₹24,713 crores. 

Future Group Shares Documents With Competition Commission

The legal dispute between the two companies centered around Amazon’s deal to invest $200 million in Future Coupons. The independent directors at Future Retail have disclosed new documents in a letter to the CCI to strengthen their case against Inc. 

On Sunday, a 160-page stock exchange filing showed the directors reviewed records related to the 2019 deal between a group unit, Future Coupons, and Amazon. Disclosures by the U.S. firm before the CCI when it sought approval of the deal contradicted Amazon’s own internal communications at the time.

Amazon has successfully used the tie-up to block Future’s attempted sale of retail assets to rival Reliance for $3.4 billion. The Indian company was banking on it to help keep its business afloat.

Future’s directors told the CCI in a November 10 letter that Amazon’s intentions were not to invest in Future Coupons because of its “unique business model and strong growth potential,” as it stated while seeking approvals. This was according to the Sunday filing.

Rather, the U.S. firm was using a” ‘twin-entity investment’ structure to invest in Future Retail” due to Indian law restrictions. According to an internal email from an Amazon India executive to other senior Amazon executives, this was entitled “Future Retail Limited Investment.”

The letter from Future’s independent directors stated that the CCI has to revoke the approval granted for Amazon’s investment.

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