Amazon had bought 49 per cent in one of Future Group’s unlisted firms, Future Coupon.
New Delhi:
The Enforcement Directorate is investigating retail giant Amazon for alleged violations of the foreign exchange law in its deal with Future Retail. The agency has filed a case after the Delhi High Court recently made observations about the deal while hearing Amazon’s challenge to the acquisition of the Kishore Biyani-led Future Retail by the Reliance Group.
The High Court had observed last month that e-commerce giant Amazon had, through three agreements, indirectly gained control over Big Bazaar owner Future Retail without the approval of the government, which appeared to be a violation of the Foreign Direct Investment Rules under the Foreign Exchange Management Act (FEMA).
“We are not aware of any new case by the ED against Amazon India,” said a company spokesperson.
Amazon had bought 49 per cent in one of Future Group’s unlisted firms, Future Coupon, with the right to buy into the listed Future Retail Ltd (FRL) after a few years if the government ended the bar on foreign ownership of multibrand retailers.
In the shareholders’ agreement, Amazon had barred Future Coupon from selling its assets to 15 companies, including Reliance Industries.
But in August, Reliance Retail acquired a 30 per cent stake in Future Group’s retail, wholesale, logistics and warehousing businesses for Rs 24,000 crore, which triggered the row with Amazon.
Amazon first approached the Singapore International Arbitration Centre and later approached the Delhi High Court.
In the last hearing, the court rejected Future Retail’s request that Amazon be restrained from writing to regulator SEBI, the Competition Commission and other authorities about the Singapore order against its proposed deal with Reliance Retail.
