Despite Amazon’s objections, the Competition Commission of India (CCI) has cleared the Future-Reliance deal.
Announcing the decision on Twitter on Friday, CCI said, “Commission approves acquisition of retail, wholesale, logistics & warehousing businesses of Future Group by Reliance Retail Ventures Limited and Reliance Retail and Fashion Lifestyle Limited.”
The Jeff Bezos-led Amazon had claimed before the CCI that the so called “injunction” of the Emergency Arbitrator was binding on CCI and that CCI should stop processing the application and should not give its approval. But CCI has now gone ahead and approved the deal.
Sources said that none one other than a writ court in India can bind the CCI and “injunct” it. No regulator can be bound by the so called “injunction” of the arbitrator, they pointed out.
It has been pointed out that Future Retail Limited (FRL) is a listed company and Section 230-234 of the Companies Act is a code in itself.
A company and its shareholders/creditors have unrestricted right to enter into a scheme of arrangement. The only requirement is that the scheme has to be passed with requisite majority.
If a shareholder has a grievance, he can vote against or represent the matter before the NCLT, provided the shareholder has the minimum prescribed shareholding to object. The NCLT will take a decision after hearing such objection, if any, from the shareholders or the creditors who are eligible to object, in the interest of the shareholders, creditors and the public.
Amazon, which is not even a shareholder of FRL, was trying to stop the scheme by waving a so called “injunction” from a foreign Emergency Arbitrator.
Sources said Amazon would know that it cannot get such an order from the Indian courts in view of the clear provisions of the Companies Act.
Observers said that If Amazon feels there is a breach of some agreement by Biyanis, their recourse can only be to Biyanis.
Amazon cannot play with the lives of 50,000 employees, who will lose their jobs if the scheme is not implemented. Amazon’s intent is only to cause delay by which time the value of Future will erode, sources said.
If Future group goes into bankruptcy, Rs 30,000 crore of public money will be lost. Amazon has not approached the Indian courts only because it knows it cannot get an order to stop the scheme, the sources added.