CAIT On Future Coupons Deal

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On November 29th, the Supreme Court extended the timeline for CCI to give a ruling in the matter by two weeks

Both CAIT and Independent Directors of Future Retail have asked CCI to revoke its nod to the Future Coupons deal

Future and Amazon have been at loggerheads since signing of the RIL-Future Retail deal worth $3.4 Bn

The traders’ body further said that Amazon’s claim that CCI does not have the power to revoke the approval given to Amazon’s investment into Future Coupons, is wrong.

The statement from CAIT comes after a Reuters report said that Jeff Bezos-led Amazon has written to the antitrust body saying that its investment in FCL was compliant with foreign investment laws, and scrapping the deal will be anti-competitive. 

According to the report “the power to revoke an approval is a drastic power and is not available to a statutory authority unless expressly provided.”

Responding to the claim, the traders’ body asked why Amazon had not brought up the claim in any of the recent court hearings. “It’s an afterthought just to get the matter escaped from CCI,” it said.

CAIT has accused Amazon of not revealing its strategic interest in Future Retail while seeking approval for the deal.

The traders’ body also mented extract from an “email” purportedly sent by Amazon India official Rakesh Bakshi to Bezos. The email talks about Amazon gaining shares in Future Retail through the Future Coupons deal.

CAIT’s Secretary General Praveen Khandelwal said that the email is part of the evidence submitted with the CCI.

According to a 60-page confidential document seen by Reuters, Amazon also said that revocation of the 2019 deal between Amazon and FCL is “bound to send a message to foreign investors that the economy and regulatory landscape of India are still not developed enough to provide stability and certainty to foreign investments”.

The ecommerce giant further claimed that Future’s aim ‘to unwind the investment’ to allow Reliance to consolidate its position ‘will further restrict competition in the Indian retail market’.

Amazon, however, has not replied to an email query from Inc42 on its letters sent to the CCI.

The development comes around the time when the antitrust body is likely to give its ruling in the case of Amazon’s investment into Future Retail.

On November 29th, the Supreme Court extended CCI’ timeline to decide and give a ruling in the Amazon-Future Coupons case by two more weeks.

In 2019, Amazon bought 49% of Future Coupons for $200 Mn. Through this, it acquired 3.58% in Future Retail.

Letters To CCI And Regulatory Actions

Apart from the traders’ body, the Independent Directors of Future Retail have written twice to the commission seeking annulment of its clearance to Amazon’s investment in Future Coupons made in 2019.

In one of their letters, the directors stated that Amazon “concealed facts, made misrepresentations to the CCI to seek approval for its investment in Future Coupons, a promoter holding company.”

Reiterating the directors’ statements, CAIT also wrote to the CCI, stating that the ecommerce major had made false statements. It had added that only a levy of penalty will not suffice and will be illegal.

Amazon’s senior vice president and country manager for its India operations, Amit Agarwal, however, did not appear for questioning before the Enforcement Directorate last week relating to Amazon’s investment in Future Coupons

Tussle At Several Forums

Future and Amazon have been at loggerheads at several regulatory and legal forums after Mukesh Ambani’s Reliance Retail signed a deal with Future Group to buyout its retail assets for $3.4 Bn. Following the deal, Amazon took the issue to Singapore International Arbitration Centre (SIAC). 

On November 8, the Mumbai bench of NCLT directed Future Group to not hold any meeting of creditors or shareholders on the proposed buyout by Mukesh Ambani led Reliance Retail.

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