Follow SC order onfuture-ril deal, Amazon writes to Sebi
US e-commerce giant Amazon has written to Ajay Tyagi, chairman of market regulator Securities and Exchange Board of India (Sebi) to comply with the Supreme Court judgment on the $3.4-billion merger of Future Group and Reliance.
It has requested Sebi to direct the Indian Stock Exchanges to withdraw the observation letters related to this deal with immediate effect.
In January this year, Sebi had given a go-ahead to Future Group’s scheme of arrangement and sale of assets to Reliance, based on which the Bombay Stock Exchange also granted its “no adverse observation” report to the $3.4-billion deal. Sebi had allowed the deal with some riders, five months after it was announced last year in August.
However, earlier this month, the Supreme
Court ruled in favour of Amazon in a case that pitched the American online major against Kishore Biyani’s Future Group and Mukesh Ambani’s Reliance Retail, which is set to go big on e-commerce. The ruling puts the $3.4-billion merger deal between Future and Reliance on hold.
In the letter, Amazon referred to the Supreme Court judgment upholding the enforcement of the interim award issued by the Emergency Arbitrator in SIAC (Singapore International Arbitration Centre) Arbitration. Amazon said the observation letters were conditional on the outcome of the ongoing proceedings, and the Supreme Court had upheld the enforceability of the EA (Emergency Arbitrator) Order. It had injuncted inter alia the presentation, pursuit and carriage of the applications before the Indian Stock Exchanges.
“In light of the directions contained in the Enforcement Judgment, and the EA Order whose validity has been affirmed by the Supreme Court, Amazon requests you to take all such action as is necessary to comply with the Supreme Court judgment, and to further ensure that no communications subsist or emanate which are at variance with the... judgment,” said the letter dated August 17, 2021, which was seen by Business Standard.
“Accordingly, we request your good offices to direct the Indian Stock Exchanges to withdraw the Observation Letters with immediate effect.”
“The purpose of this letter to Sebi is primarily to put on record Amazon's position after the Supreme Court’s judgement this month that stalled Ril-future deal and withdraw the Observation Letters that gave approval for the deal to go ahead,” said Salman Waris, managing partner at technology law firm Techlegis Advocates and Solicitors.
Amazon said in the observation letters that the Indian Stock Exchanges had communicated a conditional approval with respect to the Draft Composite Scheme of Arrangement between companies of Future Group and Reliance Group and their respective shareholders and creditors.
Future Retail had on Saturday filed a new case against Amazon.com Inc at the Supreme Court in its latest attempt to get clearance for its $3.4-billion deal.
In its more than 6,000page filing, Future has reportedly argued that if the deal with Reliance doesn’t go through, it would cause “unimaginable” damage to the group. This includes possible job losses for 35,575 employees.
This also put at risk the $3.81 billion in bank loans and debentures.
Amazon said the observation letters were conditional on the outcome of the ongoing proceedings, and the Supreme Court had upheld the enforceability of the EA (Emergency Arbitrator) Order