Future group firms convene shareholder, creditors meetings to seek approval for the Reliance deal

Future group firms are convening meetings of their respective shareholders and creditors in November to seek approval to their proposed merger into Future Enterprises as part of the Rs 24,713-crore deal with Reliance Retail. Several listed transferor firms including

Future Retail

,

Future Consumer

, Future Enterprises, Future Lifestyle Fashions, Future Markets Networks, and Future Supply Chain Solutions – have informed their shareholders and creditors about the meetings which will take place on November 10 and 11.

The meetings of the equity shareholders, secured creditors, and unsecured creditors will be held through video conferencing /other audio-visual means, said Future group companies, adding that a remote e-voting facility will be offered to all participants.

The scheme of arrangement between Future and Reliance Retail announced in August last year entails the consolidation of Future Group’s 19 companies operating in retail, wholesale, logistics, and warehousing assets into one entity — Future Enterprises Ltd.

Future Enterprises Ltd is the transferee company to Reliance Retail.

The meetings are being called as per the order passed by the Mumbai Bench of the National Company Law Tribunal (NCLT) on September 28 that had asked Future group to take approval from its shareholders and creditors over the scheme of arrangement.

E-commerce giant Amazon, which is contesting the deal, did not respond to e-mailed queries seeking comments on the shareholders’ and creditors’ meeting.

On October 1, Reliance Retail Ventures, the retail arm of

Reliance Industries

, had – for the second time – extended the timeline for completing its Rs 24,713 crore deal with Future group to March 31, 2022, as it still awaits regulatory and judicial clearances.

In August last year, Reliance Retail Ventures Ltd (RRVL) had said it will acquire the retail and wholesale business, and the logistics and warehousing business of Future Group for Rs 24,713 crore.

The deal has been contested by Amazon, an investor in Future Coupons that in turn is a shareholder in Future Retail Ltd.

In August 2019, Amazon had agreed to purchase 49 per cent of one of Future’s unlisted firms, Future Coupons Ltd (which owns 7.3 per cent equity in BSE-listed Future Retail through convertible warrants), with the right to buy into the flagship Future Retail after a period of three to 10 years.

After Future’s deal with RRVL, Amazon had dragged Future into arbitration at the Singapore International Arbitration Centre (SIAC).

In October, an interim award was passed by the Emergency Arbitrator (EA) in favour of the US-based e-commerce major that barred Future Retail from taking any step to dispose of or encumber its assets or issuing any securities to secure any funding from a restricted party.

Amazon and Future have also filed litigations in Indian courts, including the Supreme Court, on the issue. The apex court had recently ruled in favour of Amazon by holding that the EA award was valid and enforceable under Indian laws.

Notably, the Kishore Biyani-led Future Retail Ltd, on August 28, said it has approached the Supreme Court against an order passed by the Delhi High Court to maintain the status quo in relation to the deal and directing it to enforce the order of the Singapore-based Emergency Arbitrator.

Future Retail a “proper party” to ongoing Amazon dispute, Singapore panel rules

The Singapore International Arbitration Centre (SIAC) has ruled that

Future Retail

Ltd (FRL) is a “proper party” to the ongoing arbitration between Amazon and Future Coupons Pvt Ltd (FCPL) over Future’s plans to sell its assets to

Reliance

Retail, according to a person familiar with the development.

FRL had been arguing that it has not singed any agreement with Amazon and had maintained that it was FCPL that had signed a shareholder agreement with the US giant while Amazon in 2019 invested about Rs 1,400 crore into FCPL that own about 9.8% in FRL.

There are three different agreements singed at the time of the Amazon’s investment in FCPL. One is between Amazon and FCPL, other between FCPL and BSE-listed FRL and third between FCPL and Future Group.

SIAC ruling has said the three different agreements “must be read together,” the person said. The order came late on Wednesday, he added.

In January, FRL had petition SIAC to exclude it as a party to the arbitration as well as the Indian group had prayed SIAC to remove an October 2020 stay that had restrained FRL from selling its assets to Reliance Retail until the final outcome of the Amazon’s petition.

In July, SIAC had concluded a week-long hearing from both the parties and a judgement to the one of the petitions has come now.

Amazon had moved SIAC in October 2020, barely two months after Future Group said it has agreed to sell its assets and business on a slump sale basis to Reliance Retail for Rs 25,000 crore.

After months of legal battle in India – first in the Delhi High Court and then in the Supreme Court – the focus of the case has shifted back to SIAC after India’s apex court ruled that the interim order by SIAC’s 2020 emergency arbitrator is valid and enforceable in India. The Supreme Court ruling was a setback for Future Group that had for months argued that the SIAC emergency order was not enforceable in India.

Amazon files another petition in SC against NCLT order on Future Retail

Amazon on Wednesday filed another petition in the Supreme Court to stay an order of the National Company Law Tribunal (NCLT) that had allowed

Future Retail

Ltd (FRL) to convene meetings of its shareholders and creditors to seek approval on a sale proposal to Reliance Retail.

The latest petition was filed on a day when the Singapore International Arbitration Centre (SIAC) had dismissed a January petition by FRL to exclude itself as a party to the ongoing arbitration process.

In the latest plea, Amazon said the NCLT’s September 28 order was “in violation” of a September 9 order by the apex court that had directed statutory bodies to put on hold for four weeks all proceedings regarding the Rs 25,000-crore proposed deal between Future Group and Reliance Retail.

Statutory bodies involved in this deal include the NCLT, the Competition Commission of India (CCI) and the Securities and Exchange Board of India (Sebi).

Now, Amazon is seeking both a stay on the NCLT order and legal curbs to restrain the proposed meetings of shareholders and creditors of FRL. These meetings are scheduled to be held on November 10 and 11. The Indian retailer had issued notices on Oct 11 to hold these meetings.

Amazon’s India office didn’t respond to ET’s queries. In February, Amazon had approached the NCLT, objecting to Future Group’s petition that sought the latter’s approval to hold a shareholders’ meeting.

While allowing the application of the Kishore Biyani-owned group on September 28, the NCLT pision bench presided by Suchitra Kanuparthi and Chandra Bhan Singh had refused an oral application of the Amazon counsel to stay the operation of the order for one week.

“The advocates of the company are in receipt of an intimation from advocates of Amazon.com NV Investment Holdings LLC that Amazon has filed an Interim Application in the SLP (Civil) Nos. 13556-13557 of 2021 filed by the company and pending before the Hon’ble Supreme Court of India,” FRL told the stock exchanges in a late evening filing on Wednesday.

In another regulatory filing late on Wednesday, FRL also intimated the stock exchanges about the latest SIAC order that has held that FRL is a “proper party” to the ongoing dispute between Amazon and Future Coupons Pvt. Ltd., the promoter company that owns 9.8% of the BSE-listed FRL.

The Singapore arbitration stems from Future Group’s August 2020 announcement that it had agreed to sell its assets and business on a slump sale basis to Reliance Retail for about Rs 25,000 crore.

Amazon objected to the deal and had approached SIAC two months later for a stay, citing a 2019 investment agreement in FCPL that the US e-commerce giant argued restrained FRL from selling its assets to large Indian and global entities, including Reliance.

Amazon accused FRL of breach of contract while Future Group lawyers argued in different legal forums that the agreement is between promoter firm FCPL and Amazon and the listed entity FRL has nothing to do with it and is free to take a decision to sell its assets.

This August, the Supreme Court ruled that the October 2020 interim order by SIAC’s emergency arbitrator – that had stayed the Future-Reliance deal – is valid and enforceable in India.

( Originally published on Oct 21, 2021 )