While allowing the application of Kishore Biyani-owned group, the division bench preceded by Suchitra Kanuparthi and Chandra Bhan Singh also refused oral application of Amazon counsel to stay the operation of the order for one week. In February, Amazon had approached the National Company Law Tribunal (NCLT), objecting to Future Group’s petition that sought the latter’s nod to hold a shareholders’ meeting.
The Supreme Court, earlier this month, directed statutory authorities including NCLT, Competition Commission of India (CCI) and market regulator Sebi not to pass any final order related to the merger deal for next four weeks.
The development comes after the Mumbai bench of the NCLT directed both Future Retail as well as Reliance Retail to submit their petition as a composite scheme rather than two separate scheme matters as transferee company and transferor company.
Future Group company was represented by advocate Hemant Sethi, while Amazon was being represented by Senior Counsels Zal Andhyarujina and Arun Kathpalia.
Amazon indirectly owns a 5% stake in Future Retail, which runs all the departmental stores of the group–Big Bazaar, HyperCity, Easyday and Nilgiri’s. Amazon’s stake is held through the 49% ownership, bought last year for Rs 1,500 crore, in Future Coupons. In August last year, Reliance Retail agreed to acquire the retail assets of Future Group in a deal that will see the merger of five listed entities, including Future Retail, into Future Enterprises (FEL) that currently houses the group’s retail back-end infrastructure. The retail business will then be transferred to Reliance in a slump sale for nearly Rs 25,000 crore, thus obviating any need for a stake sale.
Amazon, like other shareholders of these listed companies, will get shares in FEL, which will manage consumer goods and insurance businesses.
The US e-commerce major argued in its petition that it has a valid position at this stage to intervene in the petition seeking directions from the tribunal for convening meetings of the shareholders and creditors of the companies that form part of the composite scheme.
At present, the dispute between Amazon and the Future Group is being contested at the Singapore International Arbitration Centre (SIAC). “The tribunal should adjourn further proceedings in the instant petition, until the issuance of the final award in SIAC Arbitration, restrain Future Retail from taking any steps in furtherance of or in aid of the scheme and refrain from directing any meetings of the shareholders and creditors,” Amazon said in its plea.
