- Independent directors of Future group have alleged Amazon of lying to the Competition Commission of India in order to buy a stake in Future Coupons.
- Amazon’s challenge to Future-Reliance deal is in the final round of the battle as the Supreme Court is soon set to decide on the matter
- Either way, Amazon is now in deep trouble as the e-commerce giant has to fight on multiple fronts to stay relevant in India
In one of the historic moments in Amazon’s 27-year old history, the Jeff Bezos led American multinational giant is set to get a humiliating rebuttal in India. The Future Group has now openly vowed to expose Amazon’s childish and inconsistent stand over the Future-Reliance deal.
Amazon to be challenged in CCI:
As the court battle involving Amazon’s unsolicited objection to the Future-Reliance deal intensifies, the independent directors of Future Retail Ltd (FRL) have decided to take a public stand against Amazon in the matter. Ravindra Dhariwal, one of the independent directors of the company said to PTI that they are collating information and documents which will bring out inconsistent representation made by the e-commerce giant before the competition commission of India(CCI) with regards to the Future-Reliance deal.
“We are going out to point exactly to CCI, this is what they have told you and this is what the internal documents are saying. We are going to expose the details of contradiction and details of misrepresentation, which they have made, We are going to show the true face of Amazon to the whole world” said Dhariwal.
On being questioned about the intention behind raising the issue 3 years after the Future Coupons and Amazon deal, Dhariwal informed that the independent directors were not aware of the intentions behind Amazon’s deal. Dhariwal also refers to the fact that if Amazon is allowed to have its way, then more than 50,000 employees will lose their jobs and more than 30,000 crores will be wiped out of India’s public sector banks.
Amazon allegedly lied in order to buy stakes in FPCL:
Currently, Amazon holds a 49 per cent stake in Future Coupons Private Ltd.(FPCL). However, last week, the independent directors approached the CCI to effectively remove Amazon’s stake in FPCL because, allegedly, the e-commerce giant has been making a series of false statements before the CCI itself. In their letter to the CCI, the directors had said- “CCI would have become wary and forwarded the papers to DEA (Department of Economic Affairs) for examination if the acquisition of controlling rights is allowed under FEMA regulations, Amazon has cleverly prevented CCI from doing this and has taken shelter that its investment in FCPL is under automatic route.”
Amazon’s flip-flop stand on Future-Reliance deal:
As reported by TFI, In August 2020, the Future group had agreed to sell its retail, wholesale, logistics, and warehousing businesses to Reliance Retail. Amazon, an investor in Future Coupons that in turn is a shareholder in Future Retail Ltd. vehemently objected to the deal. Subsequently, Amazon took Future Group to the court on the basis of a non-compete clause that it has signed with the wholly owned but unlisted subsidiary of the future group. The deal, which is worth over a whopping Rs 24,713 crores posed a big threat to Amazon, which had invested in India intending to establish its monopoly over the country’s e-commerce sector.
Mr Dhariwal and other independent directors are believed to have given a head start to the Future-Reliance deal only after having consent from Amazon. Explaining that FPCL had given full consent to the deal, Dhariwal said- “We independent directors were told very clearly that Amazon has agreed to that and we had a consent letter from FCPL and we signed it. Now what we know is that what they represented (before CCI) that was totally wrong.” Mr Dhariwal further clarified that his and other directors’ sole intention was to protect the interest of the shareholder and neither Amazon, nor either of Reliance or Future owners can demand loyalty from them.
Amazon’s shady record:
Recently, Amazon has become a bone of contention for everyone including regulators, governments, businessmen for its allegedly corrupt practices to inflate its profiteering business. From allegedly bribing officials to breaching the privacy of individuals, Amazon is facing a multitude of lawsuits and investigations that have the potential to break the company. It has also been alleged of breaking the back of Indian businesses through fraudulent business tactics.
After having various rounds of legal battles in different courts, Amazon is finally in the Supreme court(SC). The SC is its last resort to cancel Reliance-Future deals. The importance of the case can be gauged from the fact that the Chief Justice of India himself has decided to hear this all-important litigation. Along with that, Amazon has to fight another battle in CCI, which can even render it ineligible to challenge the Reliance-Future deal. Amazon’s shady practices have made sure that it has to fight on multiple fronts to stay relevant among 1.4 billion Indian consumers.