Prime Minister Modi’s insistence on responsible capitalism is forcing many erstwhile crooked companies into unforeseen difficult circumstances. The recent meltdown of Amazon in its CCI proceedings against Future group is a testament to that.
Amazon’s counsel’s jittery response to CCI’s no:
Future Retail Limited (FRL) has revealed in its stock exchange filing that how Amazon is getting frustrated by the regulatory bodies’ strict adherence to the rule of law in the Indian business space.
According to the filing, the Competition Commission of India (CCI) is deliberating on whether Amazon- Future Coupons Private Limited (FCPL) deal deserved cancellation based on evidence produced by FRL
In one of the hearings, the counsels representing Amazon were demanding further postponement of the proceeding. CCI denied the company’s request. However, the e-commerce giant was not ready to accept the no against its request. Claiming that Amazon was trying to browbeat the CCI, FRL in its comment said, “The counsels to Amazon, in utter disregard to the norms and utter disrespect to the Indian statutory regulatory authority, refused to argue the matter. They walked out of the proceedings in an attempt to browbeat the CCI,”
Currently, due to its irrational and childish opposition to the Reliance-Future deal, the American company is involved in multiple legal and regulatory fights with Indian authorities. Firstly, it bought a 49 percent stake in FCPL. FCPL holds 10 percent shares of FRL. Indirectly; Amazon became the owner of almost 5 percent shares of FRL.
Later, FRL entered into a deal with Reliance group for its superstore business. According to independent directors of FRL, the deal between Reliance and Amazon was signed through full full-fledged involvement of Amazon. However, as the events turned out, Reliance Group decided to make a huge foray into India’s multi-billion dollars’ online shopping market.
Since the American company was already an established and dominant name in the Indian e-commerce market, the Future-Reliance deal came as a huge potential threat to the multinational giant’s monopoly.
Future group was dragged into multiple regulatory battles by Amazon:
Out of the blue, Amazon decided to challenge the legality of the FRL-Reliance deal on multiple fronts. Its claim was that since it is a minority shareholder, it has a right to object to the advances of the deal. The multinational giant took Future Group to the court on the basis of a non-competitive clause that it has signed with the wholly-owned but unlisted subsidiary of the future group.
The Jeff Bezos-owned company went to Singapore International Arbitration Centre (SIAC). The Emergency Arbitrator (EA) gave a ruling in favour of the multinational giant. After an international round of arbitration, both Amazon and Future lodged litigations in the Delhi High Court where it was ruled that the EA ruling was valid and enforceable under Indian laws. The matter then went to National Company Law Tribunal (NCLT). In September 2021, NCLT dismissed Amazon’s appeal and allowed the Future Group to hold meetings with its shareholders and creditors to seek approval for the sale of assets to Reliance Retail Ltd.
Enough is Enough-said Future Group:
As reported extensively by TFI, as these proceedings were going around in various courts, different reports started to emerge in the public domain which exposed Amazon’s serial wrongdoings in the Indian market. Currently, it is facing multiple allegations which include destroying Indian Kirana stores through illegal means, bribing Indian officials, selling illegitimate products like abortion kits and marijuana on its platform.
Since Amazon was under heavy criticism, FRL also decided to have a relook into its selling of FCPL shares to Amazon. FRL officially asked CCI to revoke the sale of FCPL shares to Amazon. The Indian retail giant cited false statements and representation by Amazon as its main concern behind its demand for an overhaul of the deal. Later, the Confederation of All India Traders (CAIT) also decided to join FRL in its demand for revocation of the deal.
The latest meltdown by Amazon is clear-cut evidence of the fact that Jeff Bezos is feeling jittered and anxious about his future in India. There is an extremely brutal and old rule in Business, i.e., ‘Perform or perish’. Prime Minister Narendra Modi’s administration has effectively changed it to ‘Perform ethically or perish’.