Supreme Court Stops Big Bazaar-Reliance Deal Worth Rs 24,000 Crore; Big Victory For Amazon?
The plans of Reliance Industries to takeover Future Group’s assets have now come to a standstill.
Yes, the Supreme Court has stopped the regulatory approval for the sale of the Future Group’s $3.4 billion asset sale to Reliance Industries Ltd.
Read on to find out all the details!
Supreme Court Stops Regulatory Approval Of Future Group’s Sale To Reliance Industries
As we all know, the US based e-commerce giant, Amazon Inc., has been demanding the Securities and Exchange Board of India (SEBI) to review the deal between Reliance and Future, which includes the sale of retail, logistics, and other assets by Future Group for $3.4 billion including debt.
The decision is finally out, and the Supreme Court has stopped regulatory approval for the Future Group’s $3.4 billion asset sale to Reliance Industries Ltd. This marks a clear victory for Amazon.com Inc.
The top court has issued notices on Amazon’s petition and asked for a written statement from Future Retail Ltd. Justice Rohinton F. Nariman has set the date for the case again after five weeks.
Amazon.com Inc. reportedly wanted the transaction not to go ahead with the intention to dominate the country’s retail sector. As per reports, Amazon is accusing Future Retail Ltd of insider trading. Amazon’s letter to SEBI claims that Future Retail revealed price sensitive details of an injunction to Reliance. This injunction was granted by a Singapore arbitrator to block the deal.
The letter states that Reliance, Ambani’s Group “was not a party to the arbitration proceedings … and could have received details related thereto only from FRL (Future Retail) or its Promoters.”
How Does This Affect Future Group?
A lower court’s verdict has been overturned by the Supreme court and stopped Reliance Industries Ltd. to approve the transaction till further orders.
This is a wrong turn of events for Future Retail Ltd. which is buried under debt and has warned of insolvency.
The coronavirus pandemic and the lockdown induced therefore have both impacted the Future Group severely. The situation was not very good even before the lockdown as the physical retail of Future Group business faced immense loss due to reduction in sales and revenues.
As per reports, the Future Group defaulted in payment of around Rs. 10,000 crores and more to financial institutions and lenders, vendors and suppliers, and to landlords as well.