Securities and Exchange Board of India (SEBI) on Wednesday, 20 January, granted approval to the Future Group and Reliance Retail deal. This decision comes as a setback to Amazon Inc, which is locked in a legal battle with the Future group over this deal.
Future and Amazon are locked in legal tussles over the Future Group’s Rs 24,713 crore agreement with Reliance Industries, alleging that the deal breached some of Amazon’s pre-existing contracts with Future Group. In August 2020, Future Group had entered into an agreement with Reliance Retail to sell its retail, wholesale, logistics and warehouse businesses to Reliance Retail Ventures.
The Mint reported that Amazon on Thursday, 14 January, had asked the SEBI to suspend its review of the Future-Reliance deal and not grant a no-objection certification, since, on 21 December, Amazon had also filed a plea before the Delhi High Court, seeking a stay on the Future-Reliance deal.
The report further added that in its letter of approval, SEBI made a reference to apprehensions raised by Amazon.
"(The) Company shall ensure that the shares of the transferee entity issued in lieu of the locked-in shares of the transferor entities is subjected to lock-in for the remaining period post scheme," SEBI stated.
It further stated, "(The) Company shall ensure that proceedings pending before SEBI against the entities part of the promoter/promoter group or are directors of the companies involved in the scheme, should be highlighted in the scheme document filed before National Company Law Tribunal (NCLT).”
SEBI, while referring to the complaints registered by Amazon and the plea filed in Delhi HC, has asked the entities involved in the amalgamation to keep their shareholders informed about the legal dispute.
"(The) Company shall ensure that any future disputes, complaints, regulatory actions or proceedings, or orders issued therein involving the draft scheme if any, shall be brought to the notice of shareholders prior to the approval by NCLT," it added.
"In light of the above, we hereby advise that we have no adverse observations with limited reference to those matters having a bearing on listing/de-listing/continuous listing requirements within the provisions of Listing Agreement, so as to enable the company to file the scheme with Hon’ble NCLT," SEBI said.
(At The Quint, we question everything. Play an active role in shaping our journalism by becoming a member today.)