NEW DELHI (Reuters) – India’s Future Group expects swift regulatory approval of its $ 3.4 billion deal to sell its retail assets, the chief executive said, even as its contending business partner Amazon.com Inc ramps up its efforts to block the deal.
Future and Amazon are at odds with the Indian group’s August deal with Reliance Industries Ltd. The US giant claims the deal violated some of its pre-existing contracts with Future.
A court in New Delhi in December rejected Future’s request to curtail Amazon’s repeated attempts to get authorities to delay the deal. But the judge left the fate of the transaction with the regulators.
“The court has already expressed its opinion that any institution can take a stand” on the sale, Future Group founder and CEO Kishore Biyani told Reuters in an interview. “So there is no reason why things should be put off.”
Amazon declined to comment on Biyani’s comments. Reliance did not respond to a request for comment.
The Securities and Exchange Board of India (SEBI), the market regulator that has been reviewing the deal for months, did not respond to a request for comment.
SEBI and India’s stock exchanges may still reject the deal or take longer to approve the deal, which is critical to the survival of Future Retail, whose more than 1,700 outlets were hit hard by the COVID-19 pandemic.
Future Retail has warned that failure to close the deal could lead to the company’s liquidation and job losses for more than 29,000 employees.
“We have recovered businesses to some extent, but there are challenges,” said Biyani, who has been named India’s retail king for the transformation of the country’s retail industry over the decades.
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The outcome of the dispute embracing Future, Reliance and Amazon will shape India’s retail landscape, especially by deciding who will prevail in the grocery market, which is expected to be worth about $ 740 billion a year by 2024.
Following Amazon’s 2019 deal with a Future unit, the Indian retailer’s groceries and fashion products will be listed for sale on Amazon’s website, while Future stores also act as local warehouses for the US giant’s food supply chain.
Biyani said he had no intention of changing his business ties with Amazon, despite the souring relationship. While criticizing Amazon, Biyani said he didn’t know what Amazon wanted to achieve by blocking its deal.
“I am disappointed,” he said. “What do they want? They want so many employees to suffer, for business to fail?”
Amazon also took Future to an arbitrator in Singapore, who issued an interim order in October saying the Reliance deal should be stopped. Although Future says the order is not binding, the US e-commerce giant continues to make efforts to block the deal.
In a letter on Tuesday, Amazon asked Indian exchanges BSE and NSE to suspend their review of the deal in light of the ongoing arbitrage in Singapore.
To support his case, Amazon shared with the exchanges on December 30 a 63-page confidential legal advice signed by a former Chief Justice of India, Dipak Misra. In the opinion, seen by Reuters, Misra said SEBI or any other legal authority “cannot ignore” the arbitrator’s interim order.
Misra and the NSE did not immediately respond to emails asking for comment. BSE declined to comment.
Reporting by Aditya Kalra in New Delhi; Additional reporting by Abhirup Roy in Mumbai; Editing by William Mallard