Amazon is in no mood to let go of its fight with Future group over the latter's deal with Reliance Industries. The online retailing giant is at the doors of the Securities and Exchange Board of India (SEBI) calling for a probe against Future Retail for insider trading, Reuters reported on Wednesday.
In a letter dated November 8 to the market regulator, Amazon has argued that it had a 2019 agreement with Future which prevented the Indian group's retail assets from being sold to certain parties, including Mukesh Ambani-led RIL. Amazon alleges Future Retail disclosed to Reliance price sensitive details of an injunction granted by a Singapore arbitrator to block the deal.
Amazon has been up in arms against RIL's acquisition of Future Group's retail, logistics and other assets for $3.4 billion, including debt. On October 25, it had gotten an interim award against the Future Group-Reliance deal from a Singapore-based single-judge arbitration panel to put the deal on hold.
The spat is being closely watched as a key test of whether Indian firms, courts and regulators will respect arbitration decisions made in accordance with overseas arbitration rules, and adds to headaches for Amazon in India which is also dealing with antitrust challenges.
Amazon believes Future Group violated the contract by entering into the deal with rival Reliance. The deal would have helped Reliance almost double its footprint as India's largest retailer.
With the dispute, Amazon is drawing the battle lines with Reliance in the race for India's estimated $1 trillion retail market, where online shopping is gaining ground. It needs the Indian partner to strengthen its foothold after becoming the authorized online sales channel for Future Retail's stores that sell everything from groceries to cosmetics and apparel.
The Kishore Biyani-group had said the Singapore arbitrator's interim order against the deal with Mukesh Ambani's RIL is not binding, and any attempt to enforce it will be resisted.
In October, Amazon had written to markets regulator SEBI and stock exchanges, urging them to take into consideration the Singapore arbitrator's interim judgement.
Future Group, which operates supermarkets and high-end food stores and has more than 1,500 outlets across India, has argued it entered into the deal to sell retail assets to Reliance because its business was severely hit by the COVID-19 pandemic and it was critical to protect all its stakeholders.
