The Amazon vs Reliance fight over the purchase of Kishore Biyani led Future Retail limited by Mukesh Ambani is turning to be very interesting as it goes into the big debate of ‘global vs local’ and ‘foreign vs Indian’. The involvement of two top corporate lawyers of the country- Harish Salve on Future Retail’s side and Gopal Subramanium on Amazon’s side- has made the case even more high profile.
So far, Harish Salve has given Amazon a run for their money with his finely crafted arguments. “Please don’t allow this American giant to kill Future Group only to further its illegitimate interest to make sure that Reliance does not get its hands in. That’s its game plan—if I can’t get it, let Reliance not get it too,” Salve said while arguing for Future Retail in a court hearing held via video conference.
Salve painted Amazon as “Big Brother in America” and said that it is out to crush small local companies. Moreover, the highly influential retail bodies have also extended their support for Reliance because Amazon has harmed their business big time in the last few years.
Comparing Amazon with colonial-era East India Company, Praveen Khandelwal, Secretary-General of the Confederation of All India Traders (CAIT), said, “The recent statement made by Indian origin Future Retail group to go for liquidation as a consequence of an acquisition battle of Amazon reminds us the colonial era when East India Company initiated the process of killing Indian business ecosystem in the same manner by acquiring the Indian States one by one and controlled & monopolised Indian business.”
Mukesh Ambani has lined up a set of top Indian lawyers including Harish Salve, Abhishek Manu Singhvi, Mukul Rohtagi and Darius Khambata while Amazon has roped in Gopal Subramanium, Amit Sibal, and Rajiv Nayar.
The Reliance vs Amazon fight in the Delhi High Court is going to be a landmark case like the Vodafone case, in which Harish Salve represented the company in the Supreme Court of India and won. The apex court overturned the judgement of Bombay High Court and this made Harish Salve an overnight celebrity lawyer.
Only a few months ago, Reliance Industries and Future Group’s retail announced a deal of 24,000-27,000 crore rupees. Future Group is led by Kishore Biyani, who is the owner of popular retail chain Big Bazaar and Mukesh Ambani was eyeing the group since he planned to enter in e-commerce and retail business. However, the deal could not be cracked due to pricing issues.
Now, the Future group has decided to merge five listed entities of the group- Future Retail Ltd, Future Consumer, Future Lifestyle Fashions, Future Supply Chain and Future Market Networks- into one entity- which will be known as ‘Future Enterprise Limited’, and this entity would be sold to RIL for around 27,000 crore rupees.
Amazon is frightened with the deal because it could destroy its booming presence in the Indian retail market; therefore, the group filed a case in Delhi High court alleging that Future Group has signed a non-competitive clause which means it could not sell the company to any competitor of Amazon.
Now Harish Salve is representing Reliance and so far he looks on the winning side. “Amazon is playing a game—it hasn’t come to an Indian court for enforcement because it knows the case will go belly up. They’re trying to interfere [with the statutory approvals for the deal with Reliance],” said Salve.
“If Amazon’s assertion that Future Retail-Future Coupons agreement has to be dovetailed into its agreement with Future Coupons is upheld, it’ll be a violation of FDI policy for multi-brand retail,” he added.
There is not an iota of doubt among analysts that Ambani-led Reliance will give a tough competition to the existing e-commerce players as the history of its operations in other sectors suggests. The upcoming years will give us a good show on the competition in the Indian e-commerce market, especially between the richest man in Asia and the richest man in the world- Jeff Bezos.
Similar to his father, Mukesh Ambani is known to work for monopoly in the markets. In the early days of the business, his father monopolized the thread-making business, and Mukesh Ambani has himself done the same in the refining and petrochemical business. Now, his company is trying to monopolize the telecommunication market and retailing business also.