'Amazon seeking to exercise control over Future without owning a stake'

The US firm claims that its contract with the unlisted Future Copouns Ltd (FCL) barred a transaction with a number of persons and companies, including Ambani and Reliance.

World’s largest e-commerce company Amazon is seeking to derail India’s biggest retail acquisition using an agreement that gave it an indirect foothold in the owner of retail chain Big Bazaar, lawyers and analysts said.
 
Amazon had in August last year bought 49 per cent in one of Kishore Biyani-led Future Group’s unlisted firms, with the right to buy into the listed flagship Future Retail (FRL) after a few years and if the government were to undo its bar on foreign ownership of multibrand retailers.
 
But FRL ran into a severe cash crunch soon after the nationwide lockdown imposed to curb the coronavirus outbreak. It cut a deal with Reliance Industries to sell assets for Rs 24,713 crore, infuriating Amazon.
 
The US firm claims that its contract with the unlisted Future Copouns (FCL) barred a transaction with a number of persons and companies, including Ambani and Reliance.
 
The lawyers and analysts said Amazon invested not in FRL but in a company owned and controlled by Kishore Biyani namely Future Coupons (FCL), which was carrying on the business of wholesale trading of goods and merchandise and marketing and distribution of corporate gifts cards, loyalty cards, and reward cards to corporate customers.
 
But that the August 22, 2019 shareholders’ agreement gives FCL critical control rights over the management and affairs of FRL, including a bar on selling any retail asset without its approval and a bar on selling assets to any restricted persons.