Future hid facts, claims Amazon

Amazon.com Inc., which is fighting to block Future Group from selling its assets to Reliance Industries Ltd, has accused the Kishore Biyani-led Future Retail Ltd (FRL) of hiding key facts from shareholders while pursuing the transaction.

In a letter addressed to Sebi, Amazon has alleged that Future Group has perpetuated “fraud” by misleading public shareholders. A copy of the letter was reviewed by Mint.

“FRL’s disclosure presents a selective and misleading picture. Such disclosure is against the public interest, misleads public shareholders (which make up approximately 70% of FRL’s shareholding) as well as perpetuates a fraud for the benefit of the Biyanis alone,” Amazon wrote in the 3 October letter.

In the complaint to Sebi, Amazon has alleged “grave and material breach of fiduciary duties by the FRL board, and said it is prejudicial to FRL, its public shareholders, and entails various breaches of the Sebi Act and the regulator’s disclosure requirements”.

Amazon’s letter to Sebi alleges that FRL has no regard for its “solemn contractual commitments, as well as binding orders passed by an internationally recognized and reputed arbitral institution, viz. SIAC (Singapore International Arbitration Centre) despite presenting its case at length before the EA (emergency arbitrator),” reads the letter. “In the event FRL and the promoters (led by Biyanis) pursue the impugned transaction, including seeking approval from Sebi, their acts would be in direct contravention of the interim award passed by the EA, and Sebi should, therefore, not approve the impugned transaction,” said the Amazon letter.

“Such cavalier conduct by a public listed company severely undermines India’s image as a pro-arbitration jurisdiction and a country which respects the rule of law and contractual obligations,” the Amazon letter to Sebi said.

In the letter, Amazon said it is confident that Sebi will promote ease of doing business in India by holding listed companies accountable to their dealings, particularly those having a material impact on public shareholders.