In August 2020, Biyani had entered into a Rs 24,713 crore pact with Reliance Retail. As part of the pact, Future Group was to trade its retail, wholesale, logistics, and warehouse businesses to Reliance Retail Retail Ventures (RRVL).
The SEBI, in its letter of authorization, documented many conditions under the Composite Scheme of Arrangement. The regulatory body has moreover cited the suspicions put forward by Amazon.
“Company shall ensure that the shares of the transferee entity issued in lieu of the locked-in shares of the transferor entities is subjected to lock-in for the remaining period post scheme,” SEBI stated.
“Company shall ensure that proceedings pending before SEBI against the entities part of the promoter/promoter group or are directors of the companies involved in the scheme, should be highlighted in the scheme document filed before National Company Law Tribunal (NCLT),” it further added.
The US-based Amazon has written to SEBI numerous times over the past three months, pleading the regulatory body to suspend the Future-Reliance deal. The company has accused Future Group of infringing an agreement endorsed by it by entering into a deal with Reliance Retail.
On December 21, Amazon Inc had also filed a plea before the Delhi High Court, yearning to stop the Future-Reliance deal.
While citing the grievances registered by Amazon and the petition filed in Delhi HC, SEBI has asked the amalgamation entities to maintain their shareholders notified about the legal conflict.
“Company shall ensure that any future disputes, complaints, regulatory actions or proceedings, or orders issued therein involving the draft scheme if any, shall be brought to the notice of shareholders prior to the approval by NCLT,” it added.
“In light of the above, we hereby advise that we have no adverse observations with limited reference to those matters having a bearing on listing/de-listing/continuous listing requirements within the provisions of Listing Agreement, so as to enable the company to file the scheme with Hon’ble NCLT,” SEBI further said.
Amazon had acquired a minority stake in Future Group after taking over 49 percent stakes in Future Coupons, which operates as the former’s promoter entity.
In accordance with the Future Group CEO, his company reached out to Amazon eight times after its financial condition had been undermined. The e-commerce giant, nevertheless, did not deliver any critical assistance.
“They could have provided us funds through affiliates or financial institutions by taking over loans from existing lenders, but they never did despite the agreement clause and our request,” Economic Times quoted Biyani as asserting earlier this month.
“The Reliance deal was a saviour for us and the employees, stakeholders, shareholders and creditors,” he added.