Last year, Amazon challenged the acquisition of Future Retail by the Reliance Group in the Delhi High Court. Following this, the HC found that Amazon itself had attempted to gain control over the entity without the government’s permission. Due to this, the Enforcement Directorate (ED) has set up a probe as it expects that Amazon violated the Foreign Exchange Management Act rules, as reported by The Hindu.
In related news, Future Group on January 26 approached the National Company Law Tribunal (NCLT) to help it finalise the $3.4 billion asset sale to Reliance Retail.
The deal has been hanging in the balance ever since the US-based e-commerce giant raised a petition in the Singapore International Arbitration Centre (SIAC) last October. The petition was raised due as the giant owns a 49 percent stake in the promoter-entity of Future Retail called Future Coupons. It has also acquired a 3.58 percent stake through Future Coupons in Future Retail.
According to the investors’ agreement that Amazon had with Future Coupons, the giant had barred the Indian entity from selling its assets to 15 companies. These companies include Reliance Industries, Walmart, Alibaba, Softbank, Google, Naspers, eBay, Target, Paytm, Zomato, Swiggy and more.
As of now, the deal remains in stasis, until a court order releases a verdict, deciding on how will Future Retail resume its business.