The future of 29,000 employees of Future Retail Ltd (FRL) will be at stake if its deal to sell assets to Reliance Industries fails. According to a Reuters report, the Kishore Biyani group has told a Singapore arbitrator while arguing against Amazon's bid to halt the deal that the company will go into liquidation if its deal to sell assets to Reliance Industries fails.
Amazon had on Sunday won an interim award against its partner Future Group selling retail business to Reliance Industries Ltd for Rs 24,713 crore after a Singapore-based single judge arbitration panel put the deal on hold. Amazon, which had agreed to purchase 49 per cent of one of Future's unlisted firms last year with the right to buy into flagship Future Retail Ltd after a period of three years to 10 years, had dragged Future to arbitration after the indebted Kishore Biyani group firm signed a pact to sell retail, wholesale, logistics and warehousing units to billionaire Mukesh Ambani's Reliance.
Future’s retail unit will go into liquidation if the transaction with Reliance doesn’t go through, hitting the livelihoods of thousands of employees and workers at its vendor firms, the Indian group argued before the arbitrator, Reuters reported citing the order that is not public.
The latest tussle puts Amazon at odds not just with FRL but also Ambani and his Reliance group which is fast expanding its e-commerce business, and threatening the dominance of Amazon and Walmart’s Flipkart in that space.
Future group has about 1,500 outlets in India, employing more than 29,000 employees. A day after arbitrator V.K. Rajah, a former attorney general of Singapore, awarded an interim relief to Amazon in a 130-page order, both RIL and FRL said they want to complete the deal “without any delay”, setting the stage for a showdown between Reliance and Amazon—each led by one of the world’s richest men.
Amazon argues that a 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.