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Amazon preaching governance is akin to demon preaching vedas: Future Retail’s independent directors

In a reply to Amazon’s letter, which alleged that the directors helped the company in the transfer of retail stores to Reliance, the independent directors of Future Retail have refuted the allegations and said there has been no stratagem whatsoever to handover any stores to Reliance.

May 30, 2022 / 02:47 PM IST
 
 
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In a strongly-worded letter to Amazon, the independent directors of Future Retail Ltd (FRL), have rebuked the e-commerce major for preaching governance.

“It is not for a company like yours to preach governance to us. This is akin to ‘a demon preaching vedas’. We, as independent directors of FRL, know our duties and have acted and will continue to act in the discharge of our duties,” said a letter from the independent directors dated May 28.

Amazon on May 19 had written a letter addressed to the independent directors of FRL alleging that the inaction of the directors helped the company in executing a stratagem and transfer of stores to Reliance. In April, Reliance had taken over 835 retail stores of Future Retail.

“Your inaction and material omissions have resulted in the execution of this stratagem orchestrated to commit a fraud by FRL, its promoters, directors and KMPs on various stakeholders inter alia constitutional courts, regulators, lender banks and its shareholders in collusion and connivance with the MDA Group,” said Amazon in its letter.

The independent directors FRL in a reply to Amazon’s recent letter accused the company of “wrecking all the prospects of revival of FRL” and causing the downfall of the company.

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“Amazon is neither a shareholder nor a creditor of FRL. On the contrary, it has been responsible for the present state of affairs in FRL. Having wrecked all prospects of revival of FRL, it is remarkable that Amazon has written a letter like this. You have no locus, whatsoever, to address any letter to us,” said the letter addressed to Amazon.

The independent director in their reply also said that Amazon’s allegations are baseless.

“It is unfortunate that Amazon is attempting to pursue the same frivolous and untenable allegations before different fora and is issuing defamatory and scurrilous public statements in this regard even while these matters are presently sub judice before the High Court of Delhi in proceedings initiated by Amazon itself,” the directors said.

According to the independent directors, Amazon’s action made the landlords apprehensive of the prospect of recovering their pending dues, because of which they started terminating the leases of the store premises from December 2020/January 2021 and asked FRL to vacate the premises.

The letter further added that the landlords are free to deal with their properties as they considered fit and they leased these store premises to Reliance. “FRL could not have prevented the lease of store premises by these individual landlords to Reliance,” it added.

Amazon and Future Retail have been embroiled in legal battles since 2020 after Future Group sold its retail assets to Reliance in an attempt to revive the debt-ridden company. Amazon had then objected to the deal and moved to Singapore International Arbitration Centre (SIAC) and sought a stay on the deal. Amazon’s objection to the Reliance-Future deal dates back to 2018 when it had bought a 49 percent stake in unlisted Future Coupons Private Limited. According to the company, one of the clauses in the agreement entitled it to pick up a stake in Future Retail at a later date. ​After years of legal tussle, Reliance called off the deal in April after secured creditors rejected the plan.

Disclaimer: MoneyControl is a part of the Network18 group. Network18 is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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first published: May 30, 2022 02:47 pm
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