RELIANCE GROUP CONFUSED
The sale of Future Group assets to Reliance Industries has led to controversy. American eCommerce giant Amazon has approached the Singapore International Arbitration Center (SIAC) alleging that the deal violates Future Group's agreement with them. Legal notices were sent to Future Coupons, part of the Future Group, for breach of the rules. ‘We have taken steps to protect our rights under the contract. Amazon sources said the details could not be disclosed as the matter was within the jurisdiction of the court.
On the other hand, Future Group sources said that they hope to resolve the dispute amicably. In fact, Future Group made an offer to Amazon, along with other business entities, to sell the assets, but it turned it down and entered into an agreement with Reliance.
Moreover, FDI regulations and the fact that the rights to make further investments in the Future Group will not be encroached upon by Amazon after three years also explain the constraints on that company's investment in futures companies.
Amazon bought a 49 percent stake in Futures Coupons from the promoters in August last year. At the time, Future Coupons held a 7.3% stake in Future Retail. Under the terms of the agreement, Amazon will be authorized to purchase all or part of the promoter's shares within three to ten years.
On the other hand, Future Group entered into an agreement in August this year to sell its retail, wholesale, logistics, and warehousing divisions to Reliance. It still needs approvals from regulatory bodies. The deal is worth around Rs. 24,713 crores. Reliance Retail, part of the Reliance Group, has raised Rs. The Future-Amazon dispute comes at a time when investments of Rs 37,700 crore are on the rise.
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