CCI could revisit its order approving Amazon-Future Coupons deal | CCI may reconsider approval order in the wake of crisis over Amazon-Future coupons deal

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New Delhi16 minutes ago

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  • CCI approved Amazon Future Coupons deal in November 2019
  • Amazon making every effort to stop Reliance-Future Group deal

Amazon’s stake in the deal between Reliance-Future Group is now looking backwards. The Competition Commission of India (CCI) has said that it can reconsider its order dated November 28, 2019, in which it approved the agreement between Amazon and Future Coupons Limited (FCL). In its 2019 filing, Amazon did not tell CCI that when it invested in Future Coupons, it prohibited promoters of Big Bazaar and other companies from partnering with or collaborating with any other retailer in India and selling.

CCI gave conditional approval

The approval granted by the CCI was conditional. CCI stated in point 16 of its order that if the information given by the buyer was found to be inaccurate at any time, the order would be canceled at the same time. The CCI had said that if any provision of the Act is violated, this approval should not be cited during any future action.

Amazon is seeking to stop the Reliance-Future Group deal

Amazon has filed a petition in the Delhi High Court seeking a halt to the deal between Reliance and Future Group. For this, Amazon has cited the deal between Future Coupons. Amazon argues that in a separate deal with Future Unit in 2019, there was a clause that Future Group cannot sell its retail assets to anyone on the list of “restricted individuals”, including Reliance. The High Court’s single judge bench had asked Future to maintain status quo on the deal with Reliance. But the double bench has stayed the order of single bench. Now Amazon has filed a petition in the Supreme Court.

ED begins investigation against Amazon

During the hearing in this case, the Delhi High Court had expressed the possibility of violation of the Foreign Direct Investment (FDI) laws by Amazon. The court had said that the concerned agencies should investigate this matter. After this, the Enforcement Directorate (ED) has started its investigation against Amazon for violation of FDI laws. Sources say that after the ED’s investigation into the matter, there is an increased possibility that CCI can also follow the path of ED.

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Reliance-Future deal was done in August

Reliance Industries Limited (RIL) had announced the purchase of Kishore Biyani’s Future Group in August. The deal was done for Rs 24,713 crore. Under the deal, Future Group’s retail, wholesale, logistics and warehousing business will go to Reliance. Reliance Retail Ventures Limited and Reliance Retail & Fashion Lifestyle Limited have bought these businesses of Future Group. Reliance had signed the deal to expand the retail business in the country.

SEBI has approved the deal

The deal between Reliance and Future Group has been approved by the Securities and Exchange Board of India (SEBI). SEBI has approved this despite Amazon’s objection. Earlier, the Competition Commission of India (CCI) has also approved the deal. Recently, Kishore Biyani, founder and CEO of Future Group, said that after the approval of SEBI, the Reliance-Future Group deal will be completed in two months. Kishore Biyani had said that both the hearing on the dispute with Amazon and the deal with Reliance will continue.

Singapore arbitration court has imposed a ban on the deal

Amazon had moved the Singapore arbitration court to protest against the Reliance-Future Group deal. The deal was stayed by Amazon’s sole arbitrator VK Raja on the petition of Amazon. However, the final decision has not been made yet. Now a three-member arbitration bench will take a final decision in the matter. The bench will nominate one member each from Future and Amazon. One member will be neutral.

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