Sebi gives conditional nod to Future-Reliance deal

Ignoring the requests made by Amazon.com, the Securities and Exchange Board of India has given a conditional approval to the contested Future Group and Reliance Retail deal.

As per Sebi riders, indebted Future Group will have to seek the approval of shareholders and the National Company Law Tribunal (NCLT) for the deal.

Based on the Sebi comments, BSE and NSE, in their separate observation reports, have stated that the comments on the draft scheme of arrangement are "subject to the outcome of any of the ongoing litigations/arbitration/ legal proceedings involving the draft scheme and/ or the decision by any competent authority/ competent court in this regard".

As per the Rs 24,713 crore deal, Future Group would be selling its retail, wholesale, logistics and warehouse businesses to Reliance Retail Ventures. But Amazon has opposed the deal.

Amazon, which had entered into another deal with Future Group earlier, had asked Sebi not to grant no-objection certificate to the deal. Both Delhi High Court and Singapore International Arbitration Centre are looking into the dispute between Future Group and Amazon.

K. Narasimhan, senior advocate, Madras High Court, said the Singapore Tribunal's proceedings would not be affected by the Sebi approval. "The approval with conditions is just one part of the process," he said.

The Sebi said, the "company shall ensure that any future disputes, complaints, regulatory actions or proceedings, or orders issued therein involving the draft scheme if any, shall be brought to the notice of shareholders prior to the approval by NCLT."

Airing the concern of Amazon it said: "Company shall ensure that the details of the complaints made by Amazon.com NV Investment Holdings, the submissions of Future Retail and the counter submissions of Amazon and all the proceedings pending and completed related to the same in the Delhi High Court, the award of Emergency Arbitrator in the Singapore International Arbitration Centre or any other ongoing court/arbitration proceedings or any other orders issued therein are brought into the notice of the shareholders of the listed entities involved in the scheme before taking shareholder approval.

Further the same shall also be brought to the notice of NCLT while filing the draft scheme for their approval".

Commenting on the approval, Amazon spokesperson said :"The letters issued by BSE & NSE clearly state that comments of Sebi on the "draft scheme of arrangement" (proposed transaction) are subject to the outcome of the ongoing Arbitration and any other legal proceedings. We will continue to pursue our legal remedies to enforce our rights".

Future Group founder and CEO Kishore Biyani had earlier indicated that it would take around 45 to 60 days to complete the deal after getting approval from the Sebi.

The stock exchanges have asked Future to ensure shareholders are informed that 74.2 per cent of the business value of the Future Enterprises Ltd is getting transferred to Reliance Retail Ventures Ltd and Reliance Retail and Fashion Lifestyle Ltd and that these two companies would not be seeking listing post the scheme of arrangement.