As talks with Future Group fail, Amazon launches attack via newspaper ads

Amazon.com Inc sharpened its attack in its bitter dispute with two Indian retailers, Reliance Industries Ltd (RIL) and Future Group, accusing them of fraud in newspaper advertisements on Tuesday. The development came after Reliance Industries suddenly took over many of Future Retail stores.

In ads headlined “PUBLIC NOTICE” in leading newspapers, Amazon said, “these actions have been done in a clandestine manner by playing a fraud on the constitutional courts in India”. In a notice published in the newspapers, Amazon warned the founders of Future Retail that any effort to transfer its assets to RIL would be liable for civil and criminal consequences.

Amazon has been contesting the planned $3.4 billion sale of Future Group’s retail assets to Reliance, first announced in 2020. The case is currently before the Supreme Court.

The move comes as billionaire Mukesh Ambani-led group took control of some Future Group stores.

Earlier, Amazon managed to legally stop the sale of the retail assets. But Reliance’s sudden possession of more than 900 Future stores has spoilt Amazon’s chances of resolving the dispute over the transfer of Future’s assets.

Negotiations collapse

After the first seizures of stores, Amazon proposed talks separate from the Supreme Court hearing to resolve the issue but on Tuesday, lawyers for both Amazon and Future agreed those negotiations had collapsed.

Lawyers of the companies told the Supreme Court that talks between Amazon.com Inc and Future Retail aimed at resolving a long-running dispute over whether Future’s retail assets can be sold to Reliance Industries have failed.

Both Amazon and Future said they would like to resume arbitration proceedings in Singapore that had been put on hold by the Delhi High Court.

“Absolutely no headway in the talks for settlement between Amazon, Future Group and Reliance on the assets of Future Retail. Sometimes we are very hopeful, but the ultimate result is nothing. Future Group is giving away its stores to Reliance despite the ongoing litigation,” Amazon told the Supreme Court.

Driven to our knees: Future Retail

In its response, Future Retail denied the charges saying, “Amazon is driving us to our knees. We are broke. Shop takeover started 15 days ago. We have no control. Reliance is taking action despite the ongoing litigation. Reliance is taking over. We can’t do anything.”

Future Group, which has more than 1,700 outlets, including popular Big Bazaar stores, has been unable to make lease payments for a bulk of its outlets. Future Group as a whole has more than $4 billion in debt.

With landlords insisting on payments or shutting down of stores, RIL transferred the leases of some stores to its name and sublet them to Future. RIL also offered all 30,000 Future Retail employees jobs.

Reliance’s takeover began with on February 25 when its staff began arriving at Future stores at night. Even many in Future’s management were in the dark about the plans, sources said.

Future has said in filings that it cannot pay rent at many outlets given its distressed financial situation and that Reliance, which had taken over many of its leases, had issued it with termination notices.

Amazon has argued that Future violated the terms of a 2019 deal the companies signed when the US e-commerce giant invested $200 million in a Future Group unit. Amazon’s position has been backed by a Singapore arbitrator.

The matter will come up for hearing on Wednesday in the apex court.