Amazon.com Inc plans to initiate criminal court proceedings this week against its Indian partner Future Retail for allowing the transfer of assets to a major rival despite a legal prohibition
Last Updated at March 3, 2022 07:06 IST
Amazon.com Inc plans to initiate criminal court proceedings this week against its Indian partner Future Retail for allowing the transfer of assets to a major rival despite a legal prohibition, three sources with direct knowledge of the matter told Reuters.
For more than a year, Amazon and Future Group have been in a legal stand-off that has stalled Future’s $3.4 billion sale of assets to Reliance Industries.
Amazon successfully halted Future’s asset sale to rival Reliance since 2020 by citing violation of certain contracts.
Future, India’s second largest retailer, denies any wrongdoing. Amazon’s position has been backed by a Singapore arbitrator and Indian courts.
Reuters reported this week that Reliance had started to take over around 500 of Future’s stores, rebranding them as its own outlets.
Reliance had previously transferred leases of some of Future’s flagship supermarkets to its name, but allowed Future to continue to operate them. Reliance has now begun to take possession of them after Future failed to make rental payments to it, sources have said.
Amazon plans to initiate criminal proceedings against Future in a New Delhi court, and to urge the court to order an investigation into the matter, one of the sources, who has direct knowledge of the plans, said.
Two other sources said the lawsuit could be filed as early as this week.
Future, Amazon and Reliance did not immediately respond to Reuters’ emails seeking comment.
Amazon will allege that Future concealed information during legal proceedings and allegedly transferred leases of its stores to rival Reliance, even though a Singapore arbitrator had halted any transfer or disposal of assets in the ongoing dispute, the first source added.
“This is going to be Amazon’s last attempt (to stop the deal),” said this source.
The plan to start criminal court proceedings would mark a significant escalation in the legal battle between Amazon and its Indian retail rivals – Future Retail and Reliance, which is led by Indian billionaire Mukesh Ambani.
The protracted fight over Future’s assets is seen as a battle for retail supremacy between Reliance and Amazon in India’s booming retail market.
In blocking the Future-Reliance transaction, Amazon has long argued that Future violated the terms of a 2019 deal in which the U.S. company invested $200 million in part of the Indian company.
Debt-laden Future has previously said Amazon is incorrectly interfering in its retail business.
(Reporting by Aditya Kalra in New Delhi. Editing by Euan Rocha and Jane Merriman)
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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