The ED has also issued summons to Future Group promoters and officials to cross-verify documents and the evidence it has collected so far in the matter.
The federal agency is examining whether Amazon was in breach of the Foreign Exchange Management Act (FEMA) when it invested Rs 1,431 crore to purchase a 49% stake in FCPL in 2019 and if it complied with regulations. FCPL owns about 10% of Future Retail Ltd (FRL), the flagship entity that runs the Big Bazaar, Food Bazaar and Easyday chains.
In its response to ET’s queries, an Amazon spokesperson said: “We are in receipt of summons issued by the ED in connection with the Future Group. As we have just received the summons, we are examining it and will respond within the given time frame.” The Future Group didn’t respond to queries.
FEMA deals with foreign exchange-related contraventions and violations are primarily treated as civil offences.
Controlling Rights Issue
The ED is also looking into the controlling rights conferred upon Amazon in the deal, said the people cited above.
Amazon has been claiming controlling rights over Future Retail (FRL) at various judicial forums, since it has 49% stake in Future Coupons. Even while passing its judgment on Amazon’s plea, Delhi High Court had early this year observed that Amazon appeared to have indirectly obtained control over the Big Bazaar owner without the approval of the government.
“They (Amazon) are required to assist the agency in taking the probe forward and both have been asked to bring certain documents with respect to the deal along with their personal finances,” said one of them.
In March this year, FCPL had complained to the Competition Commission of India (CCI) that Amazon had allegedly concealed information and misrepresented facts when it sought the watchdog’s approval for the deal. Earlier this month, independent directors of Future Retail had written to the CCI, asking it to repeal the approval it had given to the Amazon-FCPL deal in 2019, reiterating the allegations.
Amazon and FRL have been locked in a spate of legal battles after the latter decided to sell its retail assets to Reliance Industries for Rs 24,700 crore in 2020. The deal has been stalled by a Singapore arbitration panel and also the Delhi High Court following Amazon’s plea that the sale violated the contract it had with the Future Group. The matter is pending in the Supreme Court.
Amazon moved the Supreme Court earlier this week, seeking to pause the review by the competition watchdog. The Delhi High Court has asked the CCI to pass an order within two weeks.
