In a new development an order against Amazon was pronounced by the National Company Law Appellate Tribunal (NCLAT) on June 13 confirmed the order of Competition Commission of India (CCI) to suspend approval for the investment deal between Amazon and a Future group firm dating back to 2019. NCLAT has also upheld the penalty of Rs 200 crore imposed on Amazon and has directed the e-commerce giant to pay it within 45 days from today. Amazon is free to challenge the order.
Confirming the CCI’s ruling, the NCLAT said that it is in full agreement that Amazon had not made a full disclosure about its strategic interest in Future Retail Ltd – Future group’s publicly listed company which ran its flagship banner of Big Bazaar. Amazon failed to notify the relevant information pertaining to the combination of the agreements.
- The American e-commerce giant had approached the NCLAT to challenge the CCI’s decision of December 2021 to keep its approval for the investment deal between Amazon and a Future group firm in abeyance.
- CCI’s approval for investment deal of this nature or mergers and acquisition transaction is mandatory under the regulatory regime in India. Such transactions reach fruition and can be executed only after the requisite regulatory approvals from bodies such as the CCI or Securities and Exchange Board of India are received.
- The Rs 1,400 crore investment deal between Amazon and Future Coupons Pvt Ltd (FCPL) had initially received all the requisite regulatory approvals facilitating the execution of the deal and transfer of the monies.
- The legal tussle between Amazon and Future Group is over the sale of Future’s retail assets to Mukesh Ambani’s Reliance Industries Ltd for ₹24,713 crore. Reliance Industries called off the deal in April after it failed to secure necessary approvals from the lenders of Future Group.
- At present, the US giant has filed an intervention application before the Mumbai bench of the National Company Law Tribunal to restrict banks from disposing of or alienating Future Group’s assets.
- The two-member NCLAT bench comprising Justice M Venugopal and Dr Alok Kumar Mishra.
