NCLT allows Future Group to convene shareholders' meet on RIL deal

The National Company Law Tribunal (NCLT) passed an order allowing Future Group companies to convene meetings of its shareholders and creditors to seek their approval for the scheme it signed in 2020 that allows Future Group to sell its retail, logistics, and warehousing businesses to Reliance Retail for about Rs 25,000 crore.

In September 2021, the tribunal (NCLT) had allowed creditors and shareholders to hold meetings over the deal.  Following which Amazon filed a petition objecting to such a meeting of creditors and shareholders of Future Group. This petition has been dismissed by NCLT.

Amazon has been opposing Future Group’s deal with RIL since October 2020. In 2019, the US e-commerce major acquired a 49 per cent stake in Future Coupons, the promoter entity of Future Retail, for about Rs 1,500 crore.

“The schedule of the meetings of shareholders and creditors will be intimated in due course of time,” Future Retail said in a stock exchange filing.

This order comes at a time when Future Retail has shut most of its Big Bazaar stores since February 25 (Friday) and its website is also down as it missed lease payments to Reliance Industries.

RIL will open most of the 200 Future Retail stores as Reliance stores in the next week and it is in the process of taking stock, re-branding, and transferring 30,000 Future Retail and Future Lifestyle employees on to the rolls of Reliance SMSL, its manpower and staffing firm.

On February 15, the Supreme Court granted Future Retail the option to seek from the Delhi High Court’s permission to continue proceedings at the NCLT on its deal with Reliance Industries.

“This decision is crucial given the fact that shareholders will get an opportunity to take a call on the proposed scheme,” said Ashish K Singh, managing partner, Capstone Legal.

Generali JV
However, a Mumbai civil court has restrained Future Enterprises stake sale in Future Generali India Insurance Company’s stake sale till the next date of hearing and the case is adjourned till March 10.

On January 27, Future Enterprises agreed to sell a 25 per cent stake in its general insurance joint venture to its Dutch partner for Rs 1,252.96 crore in cash, and an additional consideration linked to the date of the closing of the transaction.

The case was filed by IDBI Trusteeship Services against Future Enterprises, and the order said, “This order is passed as this is of the opinion that unless this order is passed the object of granting injunction would be difficult by delay,” the order said.

The Delhi High Court is hearing four cases in the legal battle between Future Group and e-commerce major Amazon. The National Company Law Appellate Tribunal (NCLAT) is also hearing the US firm’s case challenging the Competition Commission of India’s (CCI) order cancelling its 2019 deal.