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How Ambani outfoxed Amazon in a $3.4 billion deal dispute

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3 years ago

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How Ambani outfoxed Amazon in a .4 billion deal dispute

Even as Amazon furiously tried to block formal acquisitions through lawsuits and arbitration across India and Singapore, Ambani’s Reliance Industries Ltd. quietly began poaching employees and taking over rental leases of hundreds of stores once run by Future Retail Ltd. and Future Lifestyle Fashions Ltd. in late February. Ambani’s bloodless takeover compelled Amazon to seek a resolution to the heated dispute, scared Future’s investors and bankers, and raised concerns about asset stripping.

“We were not expecting Reliance Group to take such harsh measures without even consulting us,” “In a March 2 letter to Reliance’s retail operations, Future Retail’s Chief Financial Officer Chandra Prakash Toshniwal wrote: “Please confirm that there will be no reduction in the amount due.””

Future Lifestyle also issued a letter on March 5 that voiced “concerns and shock” and asked Reliance not to take any steps that “may be considered seriously by the Lenders, who have charge on all current and fixed assets” of the company (Bloomberg has copies of both letters). Future’s credit lines may be cut off, destroying what’s left of an already cash-strapped retailer, according to the letter.

After Amazon protested to Reliance’s August 2020 bid to buy Future Retail’s stores and warehouses for 247.1 billion rupees ($3.4 billion), Kishore Biyani’s Future Group became embroiled in a battle between two giant firms. As it bled out Future Retail, the American e-commerce behemoth claimed the deal broke its 2019 agreement with another Future Group subsidiary.

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Before the outbreak, Future Group was India’s largest retail food chain, making it a tempting target for two of the world’s wealthiest men, Mukesh Ambani and Jeff Bezos of Amazon, as they vie for control of the only billion-plus consumer market where foreign corporations can compete.

Reliance, Amazon, and the Future Group representatives did not immediately respond to an emailed request for comment on the letters.

 

Investors and lenders in the Future Group, including Blackstone Inc. and L Catterton, are now waiting to see if Reliance, Future, and Amazon can reach an out-of-court solution by March 15, when they must report progress to India’s Supreme Court.

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Oppn seeks probe into Adani charges in US: ‘Obvious protection of PM Modi’

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17 hours ago

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November 21, 2024

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Oppn seeks probe into Adani charges in US: ‘Obvious protection of PM Modi’

Following US SEC charges of bribery against Gautam Adani, opposition parties criticise PM Narendra Modi and call for a JPC investigation.

As billionaire Gautam Adani faces charges in the US for alleged bribery and fraud, the Opposition on Thursday intensified its attack on the Centre over its alleged links with the Adani Group.

Gautam Adani has been charged in the US with allegedly paying $250 million in bribes to Indian officials between 2020 and 2024 to secure favourable terms for solar energy contracts. The scheme, prosecutors said, could have earned Adani’s group over $25 billion in profits.

Congress demands JPC probe

Reacting to the charges, the Congress called for a Joint Parliamentary Committee (JPC) probe into alleged scams involving Adani’s conglomerate. The party also demanded the appointment of a “new and credible” Sebi chief to investigate Adani’s financial dealings and compliance with securities laws.

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Congress leader Jairam Ramesh said the US Securities and Exchange Commission’s (SEC) actions highlight the failure of Indian institutions to investigate the group. “The indictment vindicates Congress’s demand since January 2023 for a JPC into the Modani scams,” Ramesh wrote on X.

He accused Prime Minister Narendra Modi of shielding Adani and claimed Congress’s “Hum Adani Ke Hain Kaun” (HAHK) series had exposed the businessman’s alleged fraud and his ties with the PM.

The fact that it has taken a foreign jurisdiction to properly investigate Adani only shows how Indian institutions have been captured by the BJP, and how decades of institutional development have been undone by greedy and power hungry leaders, the Congress leader said in another post.

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“All of this is consistent with a long record of fraud and criminality carried out with impunity with the obvious protection of the Prime Minister,” Ramesh charged.

Other Oppn leaders join attack

Other opposition leaders joined the attack. Trinamool Congress MP Saket Gokhale questioned the BJP’s involvement in Adani’s dealings and demanded an independent judicial probe.

Aam Aadmi Party leader Sanjay Singh accused PM Modi of allowing Adani to tarnish India’s global reputation.

ALSO READ- Adani Group shares plunge after US SEC charges, Adani Green down 16%

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Adani stocks latest updates

The allegations rattled markets, with Adani Group stocks plunging. Adani Enterprises fell 20 per cent in pre-open trade, while shares of Adani Ports, Adani Green, Adani Power, and others dropped between 7 per cent and 18 per cent.

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