Amazon succeeded in 'destroying' us: Future Retail tells Supreme Court
The Future Group on Friday stated in the Supreme Court that American e-commerce giant "Amazon wanted to destroy us, and it succeeded" amid a bitter, protracted legal battle between the two companies. Meanwhile, Future Retail Limited (FRL) CEO Sadashiv Nayak resigned from the post on Thursday without giving any reason amid the legal battle. The next hearing will take place on April 4 (Monday).
Why does this story matter?
Future Retail is embroiled in a long-running legal battle with Amazon over a $3.4 billion sale of its retail assets to competitor Reliance Industries Limited (RIL). Amazon has stalled the sale, citing the breach of a 2019 contract that prohibited the Future Group from selling retail assets to anyone on a "restricted persons" list that also included Reliance. However, FRL has denied any wrongdoing.
What happened in the Supreme Court today?
Cross-accusations continued after talks between Amazon and FRL to reach an out-of-court settlement failed and as Reliance acquired hundreds of the Kishore Biyani-led group's stores last month on unpaid rents totaling Rs. 4,800cr. "For Rs. 1,400cr (disputed deal's worth), Amazon has destroyed a Rs. 26,000cr company. Amazon has been successful in what it wanted to do," FRL said in court while facing fraud charges.
'No one wants to do business with us now': FRL
While referring to RIL's acquisition of its stores, Future Retail said, "We are hanging by a thread. No one wants to do business with us now. When the landlord gives an eviction notice, then what can we do?" NDTV reported. "Have lost control of over 835 stores, running the remaining 374 stores 'on a wing and a prayer,'" Future Retail added.
What was Amazon's response?
Meanwhile, Amazon compared FRL's claims to Ripley's Believe It or Not. It said Future's claims of being cash-strapped and unable to pay lease rent are a ploy and the Supreme Court must halt any alienation of Future assets until the Arbitral Tribunal rules on the case. But FRL responded by stating it was unable to pay its rent and even had to close stores.
What was the contentious deal between Future Group and Reliance?
Amazon had bought a 49% stake in one of Future's unlisted firms, Future Coupons, in 2019 with a right to buy into Future Retail for a period ranging from three to 10 years. Future Coupons owned a 7.3% stake in Future Retail. However, in August 2020, FRL announced it would sell its retail, wholesale, and logistics businesses to Reliance's retail arm, Reliance Retail Ventures.Share this timeline