NEW DELHI (Reuters) – Amazon.com Inc has complained to India’s market regulator that its local partner Future Retail Ltd misled shareholders by incorrectly saying it was complying with its contractual obligations to the US e-commerce giant, a letter seen by Reuters shows.
Amazon is locked in a bitter legal dispute with Future Group, which in August sold its retail assets to Mukesh Ambani-led Reliance Industries Ltd for $3.4 billion. The deal, Amazon alleges, breaches 2019 agreements by Future.
The tussle has strained Amazon’s ties not just with Future Retail – one of India’s top retailers – but also with Ambani, Asia’s richest man, and his Reliance group, which is fast expanding its e-commerce business and threatening companies like Amazon.
Amazon last Sunday won an injunction to halt Future’s deal with Reliance from a Singapore arbitrator both sides had agreed to use in case of disputes. The Indian retailer then said in a news release it had complied with all agreements and “cannot be held back” by the arbitration proceedings.
In the letter to the Securities & Exchange Board of India (SEBI) Chairman Ajay Tyagi on Wednesday, Amazon said Future’s news release and stock exchange disclosures violated Indian regulations, urging the regulator to investigate the matter and not approve the deal.
“Such a disclosure is against public interest, misleads public shareholders … as well as perpetuates a fraud for the benefit of the Biyanis alone,” Amazon letter said, referring to Future’s promoter family led by Kishore Biyani.
A spokesman for Future Group and the Biyani family declined to comment. A Future group source denied Amazon’s allegations, saying there was no question of any fraud or misleading the public or shareholders, without elaborating.
Amazon declined to comment on its letter, the contents of which have not previously been reported. Reliance and SEBI did not respond to requests for comment.
Amazon says the 2019 deal, in which it invested nearly $200 million in a Future unit, had clauses saying the Indian group could not sell its retail assets to anyone on a “restricted persons” list, which included Reliance.
Reliance, which in August bought Future’s retail, wholesale and some other businesses, has said it plans to “enforce its rights and complete the (Future) transaction … without any delay.”
The faceoff comes as Jeff Bezos-led Amazon has already been battling tighter foreign investment rules and antitrust cases in India, which is one of its key growth markets where it has committed investments of $6.5 billion.
Some Indian lawyers have argued the Singapore arbitrator’s order in favour of Amazon is not automatically enforceable and would need ratification by an Indian court. But Amazon believes the order is binding, it told SEBI. The letter asks the regulator to “suspend review” of the deal.
SEBI’s action in the matter “would promote ease of doing business in India by holding listed companies accountable for their dealings,” Amazon’s letter says.
Amazon says the Future-Reliance deal means the US giant will lose the prospect of becoming the single largest shareholder of the Indian retailer, which has an “irreplaceable and widespread network” of more than 1,500 retail stores.
Future has argued it entered into the deal with Reliance because its retail business was severely hit during the COVID-19 pandemic and it was critical to protect all its stakeholders.
The arbitrator, V K Rajah, a former attorney general of Singapore, sided with Amazon in his Oct. 25 order, saying: “The law expects businesspersons to honour their contractual commitments.”
The US company told SEBI that if the Future-Reliance deal “is implemented by completely disregarding the interim (arbitration) award, it will cause irreparable harm and injury to Amazon.”
India’s Future Retail Ltd (FRL) said on Sunday that a Singapore arbitrator’s order in its dispute with Amazon.com Inc is not enforceable under Indian law and not binding on the company.
Amazon on Oct. 25 won an injunction from the arbitrator to halt FRL’s deal to sell its retail assets to Reliance Industries for $3.4 billion, arguing the Indian retail group had violated certain pre-existing agreements it had with the US e-commerce giant.
Both FRL and billionaire Mukesh Ambani’s Reliance said in news releases later they wanted to press on with the deal without delays, setting the stage for a showdown between the Indian companies and Jeff Bezos-led Amazon.
Calling the proceedings before the so-called “emergency arbitrator” void, FRL told Indian exchanges that any attempt on the part of Amazon to enforce the order will be resisted.
“FRL is also in the process of taking appropriate legal action to protect its rights,” the company’s regulatory filing said on Sunday.
Amazon did not immediately respond to a request for comment.
FRL’s filing comes after Reuters on Saturday reported Amazon had separately complained to India’s markets regulator alleging the Indian company had misled shareholders by incorrectly saying it was complying with its contractual obligations, seeking suspension of the deal’s regulatory review.
In its Sunday filing, FRL said it had complied with all regulatory requirements and urged the market regulator and the Indian stock exchanges to continue to review its deal with Reliance for approval.
Amazon argues that a separate 2019 deal it had with a Future unit had clauses saying the Indian group couldn’t sell its retail assets to anyone on a “restricted persons” list including any firms from Reliance chief Mukesh Ambani’s group.
The deal specified any disputes would be arbitrated under Singapore International Arbitration Centre rules.
(Reporting by Aditya Kalra in New Delhi; Additional reporting by Abhirup Roy in Mumbai and Devjyot Ghoshal; Editing by William Mallard and Toby Chopra)