Reliance Industries on Saturday said that its Rs 24,713-crore deal with the Future Group has been called off, PTI reported. It cited objections from Future Group’s secured creditors as the reason behind its decision.
Shareholders and creditors of the Future Group companies had voted on the scheme of arrangement with Reliance.
“As per these results, the shareholders and unsecured creditors of FRL [Future Retail Group] have voted in favour of the scheme,” Reliance Industries said in a filing with the stock exchanges, according to PTI. “But the secured creditors of FRL have voted against the scheme. In view thereof, the subject scheme of arrangement cannot be implemented.”
In August 2020, the Future Group, led by Kishore Biyani, had agreed to enter into a Rs 24,713-crore deal with Mukesh Ambani’s Reliance Retail. Under the agreement, the Future Group was to sell its wholesale, logistics, retail, and warehouse businesses to Reliance.
The deal was, however, challenged by e-commerce giant Amazon, which in 2019 had agreed to purchase 49% of one of Future’s unlisted firms with the right to buy into flagship Future Retail Limited after a period of three years to 10 years.
Amazon had said that the Future Group had violated the contract by entering into the deal with its rival Reliance.
Following the deal between Reliance and Future Group, Amazon won an interim order against Reliance Industries’ Rs 24,713-crore deal. A Singapore-based arbitration panel had asked the Future Group to put the deal on hold.
Amazon had written to the market regulator Securities and Exchanges Board of India, the stock exchanges and the Competition Commission of India, urging them to take into consideration the Singapore arbitrator’s interim decision as it was a binding order.
Future Retail had then approached the Delhi High Court, seeking that Amazon should not interfere with the deal. Then on February 2, a single-judge bench of the High Court directed the statutory authorities to maintain the status quo on the proceedings of the deal, effectively blocking it from coming to fruition.
However, the decision was overturned on February 8 by a two-judge bench of the High Court, which held that bodies like the National Company Law Tribunal, Competition Commission of India and Security Exchange Board of India, cannot be restrained from proceeding under the law about the deal.
After this, Amazon had approached the Supreme Court challenging the Delhi High Court’s last order, saying it was illegal and arbitrary. On August 6, 2021, the Supreme Court had ruled in favour of e-commerce giant Amazon against the proposed deal between Reliance and Future Group.