By Aditya Kalra
NEW DELHI (Reuters) – India's Future Group expects swift regulatory approval of its $ 3.4 billion deal for the sale of its retail properties, the chief executive said, despite warring business partner Amazon.com Inc (NASDAQ 🙂 making efforts intensified to block the deal.
Future and Amazon argue over the Indian group's August deal with Reliance Industries Ltd. The US giant claims the deal violated some of its pre-existing contracts with Future.
A New Delhi court in December denied Future's request to hold back Amazon's repeated attempts to get authorities to stall the deal. However, the judge left the fate of the transaction to regulators.
"The court has already expressed its view that any institution can have an opinion," Future Group founder and CEO Kishore Biyani told Reuters in an interview. "So there is no reason why things should be delayed."
Amazon declined to comment on Biyani's remarks. Reliance did not respond to a request for comment.
The Securities and Exchange Board of India (SEBI), the market regulator that has been reviewing the deal for months, didn't respond to a request for comment.
The SEBI and India exchanges could still reject the deal or take it longer, which is vital to the survival of Future Retail, whose 1,700+ stores have been badly hit by the COVID-19 pandemic.
Future Retail has warned that failure to close the deal could lead to the liquidation of the company and the loss of jobs for more than 29,000 employees.
"We have restored businesses to some extent, but there are challenges," said Biyani, who has been dubbed India's retail king for transforming the country's retail trade over the past few decades.
The outcome of the dispute between Future, Reliance and Amazon will shape the Indian retail landscape, especially in deciding who will prevail in the grocery market, which is expected to be worth around $ 740 billion a year through 2024.
Following Amazon's contract with a Future entity in 2019, the Indian retailer's grocery and fashion products will be available for sale on the Amazon website, while Future stores also act as local warehouses for the US giant’s grocery supply chain.
Biyani said he has no intention of changing his relationship with Amazon despite the poor relationship. However, Biyani criticized Amazon, saying he was confused about what Amazon was trying to achieve by blocking its deal.
"I'm disappointed," he said. "What do you want? You want so many employees to suffer and the business to go under?"
Amazon also took Future to an arbitrator in Singapore, who passed an injunction in October calling for the Reliance deal to be halted. Although Future says the order is non-binding, the US e-commerce giant continues its efforts to block the deal.
In a letter on Tuesday, Amazon urged the Indian exchanges BSE and NSE to suspend their review of the deal in light of the ongoing arbitration in Singapore.
To back up its case, Amazon shared a 63-page confidential legal opinion with the exchanges on Dec. 30, signed by Dipak Misra, a former Indian chief judge. In Reuters' statement, Misra said SEBI or any other legal authority "cannot ignore" the arbitrator's injunction.
Misra and the NSE did not immediately respond to emails asking for comment. BSE declined to comment.