Amazon Approached Future Group to Withdraw ICC Complaint After FDI and FEMA Breach Allegations

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Amazon Approached Future Group to Withdraw ICC Complaint After FDI and FEMA Breach Allegations

New Delhi: US e-commerce giant Amazon last month asked Future Group to withdraw its complaint, which accuses the company of flouting foreign investment and Foreign Exchange Management Act (FEMA) rules by distorting facts, before the Indian Competition Commission (ICC), the Economic Times mentioned in a report citing anonymous people familiar with the case.

According to the ET report, the executives of the two companies met almost a month ago and at that meeting Amazon also asked Future Group for generous compensation in return for withdrawing its objections to the Reliance deal. The six-hour meeting was attended by Future Group founder Kishore Biyani and other officials, while Amazon India legal chief Rakesh Bakshi and other executives represented the US giant.

This withdrawal was supposed to be the prelude to a possible amicable settlement of the dispute that has arisen between the two companies over the proposed sale of Future’s business assets to Reliance Retail.

However, according to the financial publication, the meeting was inconclusive as Future did not agree to the preconditions for a settlement process without seeing a final agreement.

The post quoting an Amazon spokesperson said any claim suggesting a compensation claim is misplaced and substantiated.

“Amazon’s objections are based on breach of contract and specific performance of the contract. Any complaint suggesting a request for compensation is inappropriate and justified. We have always offered to assist FRL even during the duration of arbitration proceedings in various courts and this should not be construed as an offer to settle. Amazon has also written to independent directors to communicate the same. Amazon is always ready to help FRL through meaningful engagement and discussions, ”the ET report said citing the spokesperson. Future Group did not respond to ET’s email request for comment on the development.

It should be mentioned here that the independent directors of Future Retail (FRL) wrote two letters to the ICC making similar allegations of false claims and foreign direct investment (FDI) and FEMA violations against Amazon. In March this year, promotion company Future Group Future Coupons (FCPL) complained to ICC that Amazon allegedly withheld information and distorted facts while seeking approval from the competition watchdog for its investment of Rs 1,431 crore to buy a 49% stake in FCPL in 2019 FCPL owns around 10% of Future Retail (FRL), the flagship entity that manages the Big Bazaar, Food Bazaar and Easyday chains.

The FCPL accused Amazon of flouting India’s FDI and FEMA rules by distorting the facts at the commission. He said Amazon told CCI that it is investing in FCPL because of its compelling business proposition as well as the potential for growth in its business. But in “conflicting” statements to the Singapore International Arbitration Center (SIAC) and Indian courts, Amazon subsequently said that through its stake in FCPL, it had “strategic rights” to FRL and that the listed company with its nationwide network of retail stores represented an “irreplaceable strategic asset” to Amazon.

Subsequently, CCI issued a submission notice to Amazon last week and the Delhi High Court ordered the ICC to rule on FCPL’s March plea in two weeks.

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