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Future Retail accuses Amazon of ruining Rs 26000 crore company

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As the bitter and long-running legal battle continues, Future Retail told the Supreme Court that “Amazon wanted to destroy us and it succeeded.”

The next hearing is set for April 4.

The accusing and retorting continues after talks between Amazon Inc. and Future Retail Ltd. (FRL) to resolve and reach an out-of-court settlement fell through, and as Reliance Industries Limited (RIL) took over hundreds of stores of the Kishore Biyani-led group last month on unpaid rents totalling Rs. 4,800 crore. 

Future retail

Future Retail and RIL have also been accused of stealing from Amazon “For 1,400 crores (the disputed Amazon-Future deal), Amazon has destroyed a 26,000 crores company,” Future Group said on Thursday. Amazon has accomplished what it set out to do.”

“We are hanging by a thread. No one wants to do business with us now. When the landlord gives an eviction notice, then what can we do?” Future Retail added, referring to RIL’s acquisition of its stores.

Have lost control of over 835 stores, leaving 374 stores to operate “on a wing and a prayer,” according to Future Retail.

Amazon claims that clauses in a 2019 deal with a Future unit prevented the Future group from selling retail assets to anyone on a “restricted persons” list, which included Reliance. 

The company also opposes the surrender of Future Retail’s assets.

Future Retail’s assets were transferred to Amazon in a manner reminiscent of “Ripley’s Believe It or Not.” FRL let go of over 800 stores without protest.

Future Retail, on the other hand, claimed it was unable to pay its rents and was forced to close its stores.

Our accounts have been frozen due to NPA classification, so no payments can be made from them, according to the company.

Amazon, on the other hand, claimed that Future’s claims that it is cash-strapped and unable to pay lease rental are a ruse and that the Supreme Court should halt any alienation of Future assets until the Arbitral Tribunal rules on the case.

Future retail

Future Retail to Supreme court

FRL’s senior advocate Harish Salve testified that the group owns around 374 stores and that it will not sell them on its own unless “some landlords” throw them out, referring to Reliance’s takeover of stores. Salve estimates that the licence fee for 374 stores is more than Rs 1,100 crore.

“My bank accounts are frozen and I can’t pay rent. Everyone is hoping if the scheme gets through Reliance comes in and everyone will get the money,” he said, adding that there was no money to pay the rents and that if the lending banks come in, the IBC (Insolvency and Bankruptcy Code) will kick in.

“No one wants to do business with us now. When the landlord gives an eviction notice, then what can we do? For Rs 1,400 crore (worth of the Amazon-Future disputed deal), Amazon has destroyed a Rs 26,000 crore company. Amazon has been successful in what it wanted to do,” Salve, the lawyer, stated.

Meanwhile, Senior advocate Gopal Subramanium, who is representing Future Retail, stated that assets should remain with the company until the arbitration proceedings are completed.

“Our prayer is to restrain alienation of FRL’s assets in favour of any other party and assets must continue to remain with FRL and operate with FRL until the matter is resolved by the arbitral tribunal,” Advocate Subramanium said.

In addition, he said, “The question that they are short of money and could not pay lease rental is a strategy, a sham and it is to overcome the representation made before the court when they asked to let the proceedings continue.”

After Amazon dragged FRL to arbitration at the Singapore International Arbitration Centre in October 2020, Amazon and the Future Group are involved in multi-forum litigation over the issue of FRL’s Rs 24,500 crore merger deal with Reliance Retail Ltd.

Reliance allegedly took away 600 FRL stores on March 3, according to Amazon.

Future retail

Also Read: Amazon Prime to be Rs 500 costlier for annual membership; Read to know details

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