According to the firm Future Group, since the last week of February 2022, Reliance Group has unilaterally terminated its leases and forcibly took control of hundreds of Future Retail stores.

Future Retail Ltd (FRL) said on Wednesday it has “committed” to undo the acquisition of its stores by Reliance Retail and will take any action that may be necessary to seek value adjustments.

The Kishore Biyani-led company also said the Reliance Group’s move came as a “surprise”.
In addition, the move to take possession of its stores has “complicated” the positive scenario that began to build after a CCI order in December 2021, according to FRL in a regulatory filing.

“FRL and its board of directors remain committed to taking any action that may be necessary to seek value adjustments and reversal of the acquisition of the stores (leases) by Reliance Group. FRL and its Board of Directors are taking steps to arrive at a viable solution that is in the best interest of all stakeholders,” it said.
Earlier in February, Reliance Retail took over the operations of at least 300 stores from FRL and offered its employees jobs after the Kishore Biyani-led group failed to make rent payments to landlords.

“The board of directors of FRL has strongly objected to such action by Reliance Group and has advised Reliance Group to reconsider all other actions initiated in recent days,” it added.

The board of directors of FRL has also advised Reliance Group that assets such as store fixtures, store infrastructure, merchandise, inventory, etc. belonging to FRL and located in these stores are assumed as collateral in favor of the lenders from FRL.

“The board has called on Reliance Group to ensure that possession of the secured assets is not transferred and is kept unharmed in favor of the lenders,” it added.

According to FRL, there have been several media reports and public notices from Amazon misreporting that FRL transferred its retail assets to Reliance in violation of the orders of the SIAC arbitration tribunal and the Supreme Court of India.

“Such reporting is inaccurate and factually incorrect,” it said.

“FRL has not transferred the stores to Reliance Group. On the contrary, the board of directors of FRL met twice and informed Reliance Group that such a drastic and unilateral action by Reliance Group to take over the stores came as a surprise not only to FRL, but also the positive scenario, which was unfolding. after the CCI order in December 2021, in favor of the Scheme and Future Group,” it said.

On Tuesday, Amazon had come out with a public notice in newspapers alleging that FRL and its promoters had committed “clandestine” fraud against India’s constitutional courts and the arbitration tribunal formed at the Singapore International Arbitration Center (SIAC). ), adding that it reserves the right to civil and criminal appeals.

“FRL and its promoters have consistently acted in violation of the order issued by the emergency arbitrator and reaffirmed by the arbitral tribunal. It has now come to light that FRL and its promoters have attempted to take the ground of the dispute by purportingly transferring and disposing of FRL’s retail assets, comprising the stores, in favor of the MDA Group (Mukesh Dhirubhai Ambani ),” the message read. †

FRL’s statement came in response to exchanges asking for clarification/confirmations about Amazon’s public notification.
According to the firm Future Group, since the last week of February 2022, Reliance Group has unilaterally terminated its leases and forcibly took control of hundreds of Future Retail stores.

“Such termination of leases and acquisition of stores by Reliance Group came as a surprise to FRL and its board, as the Future Group and Reliance Group have worked together throughout the period to ensure full continuity of operations,” it said.

In August 2020, the loss-making retail giant proposed to sell its retail, wholesale and logistics branches, including companies such as Fashion at Big Bazaar, Koryo, Foodhall and Easyday, to Reliance for Rs 24,713 crore.

However, the deal could not be closed as Future’s warring partner, Amazon, went to court for breach of some contracts. Future denies any wrongdoing.
After the deal was stuck in a series of lawsuits and arbitrations, the long shutdown date for the settlement was extended by Reliance by six months to September 30, 2022.

“FRL has in fact welcomed the extension of the Scheme’s long shutdown date to September 30, 2022,” it said.
The Competition Commission of India (CCI), in an unprecedented move, revised the more than two-year-old approval given to Amazon to acquire a stake in Future Coupons, allowing the global e-commerce giant to claim rights to Future. retail.

On December 17, the CCI had suspended its approval of Amazon’s deal to acquire a stake in Future Coupons Pvt Ltd and also fined the e-commerce major of Rs 202 crore for certain violations.

Amazon on Tuesday informed the Supreme Court that talks with Future Group to resolve the dispute over Future Retail’s merger agreement with Reliance Retail had failed and was seeking intervention to ensure FRL’s stores are not acquired.

Earlier on March 3, the Supreme Court had granted 10 days to examine the possibility of resolving the dispute through dialogue with the Futures Group.
The companies of the Future Group have convened meetings of their respective shareholders and creditors between March 20 and March 23, 2022 to get their approval for the Rs 24,713 crore deal with Reliance Retail.

The Mumbai Bank of the National Company Law Tribunal (NCLT) had given the go-ahead on February 28 to convene shareholder and creditor meetings of the respective Futures group companies.

This post Would take steps for value adjustments, roll back Reliance store acquisition, says FRL

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