In a renewed attack, US e-commerce major Amazon has accused Future Retail’s independent directors of “facilitating” alienation and transfer of the latter’s 835 retail stores in favour of Reliance Retail. These stores — both large-format such as Big Bazaar and small-format such as Easy Day and Heritage Fresh — were transferred in the teeth of binding injunctions and court orders, Amazon said in a letter addressed to two independent directors of Future Retail (FRL).
“While the scheme has failed, it now appears that FRL sought to purportedly alienate its retail stores in favour of the Mukesh Ambani group by any means possible. You, as independent directors, have facilitated this fraudulent stratagem to defraud the Indian public and regulators,” Amazon said in the letter dated May 19, a copy of which was reviewed by FE.
By scheme, Amazon was referring to the 2020 deal Future Group had signed with Reliance Retail, a subsidiary of Reliance Industries (RIL), to sell its retail, logistics and warehousing businesses for `24,713 crore. It was later cancelled after Future group failed to secure shareholders’ and lenders’ approval.
“You, as independent directors, have facilitated this fraudulent stratagem to defraud the Indian public and regulators,” the letter said, accusing the independent directors of “gross failure” in performing their statutory duties.
Amazon also said it had apprised the independent directors and had raised serious concerns regarding various irregularities in the functioning of Future Group, especially the conduct of the Biyanis, through various letters. However, these red flags were “deliberately” ignored.
The e-commerce firm also alleged that FRL in its meeting with core lenders on January 1, 2022, had “categorically” admitted that the unpaid rental dues stood at `250 crore, and the amount was “voluntarily” retained. The rent for about two months was kept on hold due to cash crunch, Amazon said, attributing it to minutes of meetings FRL had with lenders.
“Consequently, any narrative that there was a purported transfer on account of failure to pay huge outstanding rent for as many as 835 retail stores, that too as quickly as on February 26, 2022, is nothing but a sham and a false narrative to regulators, creditors, the shareholders and the courts,” it added.
Amazon also alleged that the 835 retail stores had been “purportedly” shut down, possibly making way for stores operated by entities belonging to the MDA Group. FRL was “colluding, and in continuous discussion, with the MDA Group,” it added.
“The stratagem to erode the value of retail stores of FRL, a listed company, in collusion with the Mukesh Ambani Group and commit fraud is a matter of significant public concern. Thus, a thorough and independent investigation of the financial dealings of FRL and the Biyani family is needed,” it said, adding that the investigation has to be conducted by authorities, regulators and enforcement agencies.
The letter was copied to various departments of Sebi, lenders including State Bank of India, Union Bank of India and UCO Bank and former independent directors.
