Amazon.com has asked the country’s market regulator to investigate Future Retail for insider trading, it showed a letter seen by Reuters, as it seeks to prevent its business partner from becoming part of rival empire Reliance.
The firm has been lobbying the Securities and Exchange Board of India (Sebi) to review Reliance’s August deal to purchase Future Group’s retail, logistics and other assets for $ 3.4 billion, including debt.
Amazon argues that it had a 2019 agreement with Future, which prevented the Indian group’s retail assets from being sold to certain parties, including Reliance Industries (RIL).
The letter to Sebi, dated November 8, alleges that Future Retail disclosed to RIL price-sensitive details of a court order issued by a Singaporean arbitrator to block the deal.
The dispute is being closely watched as a key test of whether Indian companies, courts, and regulators will honor arbitration decisions made in accordance with overseas arbitration rules, adding to the headaches for Amazon in India, which is also grappling with antitrust challenges.
The court order was granted on October 25 (Sunday) and media outlets reported that Amazon issued a short statement saying it welcomed the decision. Later that night, RIL said, in a stock exchange presentation, that it had been informed of the arbitration order and that it would enforce its rights to complete the deal with Future without delay.
It is this October 25 filing that Amazon argues in its 20-page letter indicating that RIL was aware of the “price sensitive” details of the court order. RIL “was not part of the arbitration procedure … and could have received details related to it only from FRL (Future Retail) or its Promoters,” the letter said.
A Future Group spokesman told Reuters it denies the allegations made in the letter and that the news of the injunction had been in the public domain as of Sunday.
A Future Group spokesperson told Reuters it denies the allegations made in the letter and that the news of the injunction had been in the public domain as of Sunday.
RIL and Sebi did not respond to requests for comment. Amazon declined to comment on the letter.
Future Retail, which has argued that Amazon’s deal last year was only with a separate unit of Future Group, issued a statement to the stock exchange on the morning of October 26, saying it was examining the arbitration order and that he believed the order would have to. be tested by Indian law.
Amazon told the Delhi High Court on Wednesday that the Singapore arbitrator’s emergency arbitration award against Future Retail was “a valid order” and that the e-commerce chief had the right to inform statutory bodies about it.
Lead defender Gopal Subramanium, listed on Amazon, said Future Retail’s lawsuit was “dubious” and untenable.
Subramanium said Future Retail participated in the proceedings before the emergency arbitrator and also urged it not to approve an interim order until an arbitrator is appointed on behalf of Future Group. “Therefore, it cannot now be said that the EA’s interim decision is invalid and non-binding,” he said.
Dear reader,
Business Standard has always strived to provide up-to-date information and commentary on events that matter to you and that have broader political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering has only strengthened our determination and commitment to these ideals. Even during these difficult times arising from Covid-19, we remain committed to keeping you informed and up-to-date with credible news, authoritative opinions, and incisive commentary on relevant current affairs.
However, we have a request.
As we fight the economic impact of the pandemic, we need your support even more so that we can continue to bring you more quality content. Our subscription model has received an encouraging response from many of you, who have subscribed to our content online. Increased subscription to our online content can only help us achieve our goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital editor
.
