American retail giant Amazon has moved the Supreme Court, appealing against a National Company Law Tribunal (NCLT) order that had allowed the Future Group’s listed companies to hold shareholders' and creditors' meetings to clear its proposed transaction with Reliance Retail Ventures.
On September 28, the NCLT Mumbai Bench had allowed Future Group firms to hold extraordinary general meetings (EGMs) of their shareholders and creditors to seek approval for selling assets to Reliance Retail. Following the order, Future Group has scheduled its shareholders/creditors meetings from November 10 onwards.
On October 18, the NCLT had also allowed Reliance Retail Ventures to hold its creditors and shareholders meeting to acquire Future Group’s businesses.
Both Reliance and Future Group had announced in August last year that Reliance Retail Ventures would acquire the entire retail, wholesale, logistics, and warehousing businesses from Future as a going concern for Rs 24,713 crore. But the transaction was delayed due to litigation by Amazon.
Amazon, which holds 50 per cent in a holding company of Future Retail, moved an arbitration court in Singapore, saying the deal would convert Future Retail into a shell company while the businesses would be hived off and sold to its arch rival Reliance Retail. The matter is currently pending in the Supreme Court and at the Singapore arbitration centre.
While both Amazon and Future were litigating, the financial metrics of Future Group have deteriorated. All Future Group companies have reported massive losses, a fall in sales, and a substantial rise in debt in FY21 as compared to the previous financial year.