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On the decision of Singapore’s arbitration court, Reliance and Future Group say that the deal is done under Indian laws.
- Reliance-Future Group signed a deal worth Rs 24,713 crore in August
- Singapore’s arbitration court bans Amazon’s petition
Future Retail has reached the Delhi High Court against the decision to stop the Reliance-Future Group deal. Future Retail has filed a petition against the decision of the Singapore arbitration court seeking relief. Future Retail has approached the Delhi High Court to ban Amazon’s interference in the deal. Future Retail gave this information in a stock exchange filing on Saturday.
Cavite filed last week
Future Retail had filed two caveats last week amid fears that Amazon may reach the Delhi High Court over the Reliance-Future Group deal. Future Retail had urged the Delhi High Court that if Amazon files any abstention that no order be passed without hearing the Kishore Bian Promoted Group. Nor should Amazon be given any immediate relief. A senior advocate of the Delhi High Court had said that the Future Group side is strong. If he files a case in the Delhi High Court, he can win it.
24,713 crore deal was signed in August
The deal between Reliance and Future Group was signed in August at Rs 24713 crore. Under this, Future Group’s retail, wholesale and logistics businesses will be sold to Reliance Retail Ventures Limited. Amazon.com is opposing the deal. The deal was challenged by Amazon in a Singapore arbitration court. The court had stayed the deal temporarily, ruling in favor of Amazon. The court had said that the final verdict should not be pursued further.
What is Amazon’s objection?
In August 2019, Amazon bought a 49% stake in Future Coupons. For this, Amazon had paid Rs 1,500 crore. The deal stipulated that Amazon would have the right to purchase the stake of Future Retail Limited after a period of three to 10 years. According to Amazon, one of the conditions in the deal was that Future Group would not sell its retail assets to Mukesh Ambani’s Reliance Group. Now Amazon is objecting to selling Future Group’s retail assets to Reliance Industries.
Amazon has reached SEBI-BSE
Amazon has reached the Bombay Stock Exchange (BSE) and market regulator SEBI seeking to stop the deal between Reliance Industries and Future Group. Amazon has appealed SEBI and BSE to hold the deal. Amazon has cited the decision of Singapore’s arbitration court. Amazon has also provided a copy of the court’s decision.
Both groups expressed commitment to complete the deal
Despite the decision of the Singapore Arbitration Court, both Reliance Industries and Future Group have committed to complete the deal. Both groups say that the deal is done under Indian laws and will be completed on time. On the decision of Singapore’s arbitration court, Reliance and Future Group say that the deal is done under Indian laws.
Amazon wants to strengthen its hold in India
Reliance is eyeing the online retail space in India, led by Amazon and Flipkart. At the same time, Amazon is working to strengthen its hold in the offline retail business due to its strong online presence in India. For this, Amazon acquired the supermarket chain of Aditya Birla Group in 2018 along with private equity fund Samara Capital. Experts say that this deal between Amazon, RIL and Future Group has been worried. Because this can give a tough competition to the company in India.
Reliance is playing a big bet in retail
At present, Reliance Retail runs around 12,000 stores in the country and Mukesh Ambani is playing big bets on retail. The equity valuation of Reliance Retail currently stands at Rs 4.28 lakh crore. Constant stake is being sold in it. So far, around 8 companies have invested in it. Mukesh Ambani has so far raised 37 thousand crores by selling its stake. Reliance Retail is also doing digital delivery with Geomart.