Amazon and Reliance are in turmoil over the acquisition of Future Group. And even though the legal power of the acquisition is with Reliance, Amazon is trying its best to stop the same. This is because if Reliance completes the acquisition, it is bound to produce huge competition for Amazon. So, Amazon alleges Future Group of insider trading when the legal efforts of the company were going unnoticed.
Amazon’s allegations on Future Group
According to Amazon, the deal that they had with Future Group signed in 2019 barred it from selling its retail assets to any company. The e-commerce giant says that Future Retail has hidden the details of their deal with Reliance and misguided the shareholders. And has urged SEBI to look into the same. This has now gone so sour between the companies that Amazon has now asking Future Group to pay Rs 1,431 crores and interest on it.
Even though Amazon tried to sabotage or at least hold the deal was with Singapore arbitrator’s interim judgment. But since that judgement did not hold under India law, so its did not help much. So, now the company is asking SEBI to held the deal by considering the judgement. Amazon very-well knew that SIAC’s judgement wouldn’t be of much help; that’s why it turned to SEBI for the same.
What effect might it have on the companies?
If Reliance is able to grab the deal with future Retail, it will become the largest competitor of Amazon in India. Ambani’s plan to take hold of the e-commerce market might become a reality with this acquisition. The vast range of stores that the future retail has plus Reliance’s JioMart will eat away a huge chunk of the market share of Amazon. And if Amazon is able to stop the deal and is able to get a stake in Future Retail, its roots in India will expand even further.
The situation both the companies are in now is very sensitive, and it seems Reliance has the upper hand. This is because it hasn’t been doing anything against the law, and also SIAC’s orders are concrete and become compulsory only if enforced by law.
As Amazon alleges Future Group do you think the e-commerce giant will be able to sabotage the deal? Let us know in the comments below. Also, if you found our content informative, do like and share it with your friends.