Billionaire Mukesh Ambani has accused the independent directors of Amazon Future Retail Limited (FRL) of facilitating a “fraudulent strategy” to transfer 835 stores to Reliance Group, saying the details of the transfer were a “fraud” due to the failure to pay huge arrears. “As the retailer said a month before such a move, the arrears of rent were only Rs 250 crore.
The U.S. retailer wrote to FRL’s independent directors on May 19 that the firm, in a meeting with the main lender banks on January 1, 2022, “clearly acknowledged that the unnecessary rent arrears were only Rs 250 crore.” The FRL also said that it had voluntarily retained the amount. ” “Surprisingly, FRL was able to do this without shutting down any of its activities or handing over its stores,” it wrote. “Therefore, the alleged transfer due to failure to pay huge arrears of rent for 835 retail stores, as fast as February 26, 2022, is nothing but a fraud and a false statement to the regulators. , Creditors, shareholders and the courts. “Future and Amazon were embroiled in a bitter legal battle after the US e-commerce giant Future Group was dragged into arbitration at the Singapore International Arbitration Center (SIAC) in October 2020, arguing that FRL violated their agreement with the bill. Ambani sold its assets to Reliance Retail on the basis of recessionary sales of Rs 24,713 crore.
The Reliance deal fell last month after FRL’s creditors rejected it. But before that, the Reliance Group, referred to by Amazon as the MDA Group, took over the activities of dozens of futures stores after retailers failed to pay rent.
“On January 22, 2022, FRL issued a letter to Bank of India, State Bank of India and Saraf and its partners, reiterating its position on the sale of small store formats in clear disregard of the mandatory order against FRL. If FRL is not available in retail stores, FRL will be unable to make such a statement, ”Amazon said.
“The alleged transfer of FRL’s retail assets is, thus, not due to non-payment of arrears of rent.” “The alleged transfer is nothing more than a deliberate fraudulent move to pursue a strategy of explicitly isolating retailers without following the rule of law.” This was done without notice from the court, the regulator, the lender bank and was motivated only by the desire to defeat the final prize passed in the arbitration proceedings on behalf of Amazon, “it says.
An FRL spokesman did not immediately return calls seeking comment.
“The strategy of segregating retailers grossly devalues retailers and further falls under legislation such as unfair trade to defraud lenders,” he said, warning that promoters, KMPs and directors, including independents, are liable to imprisonment under various provisions. Companies Act, 2013 including law.
Amazon said FRL said for the first time on March 9 that the termination notice was issued by companies affiliated with the MDA Group. “FRL has also revealed that at least 835 retail stores (55% – 65% of FRL’s total revenue) have been reportedly closed, possibly paving the way for stores run by companies belonging to the MDA Group.” “FRL was collaborating with the MDA group and was in constant discussion,” it complained. The circumstance surrounding the alleged surrender of the retailer by the FRL to the MDA Group proves that the so-called ‘transaction’ was nothing more than a camouflage and a ploy, concocted and concocted by the MDA Group, to be allegedly transferred by the FRL. Retail Stores. “Amazon sues FRL” for allegedly plotting to isolate and relocate about 835 retail stores, including ‘Big Bazaar’ and small-format stores such as ‘Easy Day’ and ‘Heritage Fresh’ To Ambani’s Reliance. (MDA Group) “On the teeth of bound orders and court orders.” It said lenders’ refusal to sell assets to Reliance to the retailer “is a fact, and indicates a greater discomfort as FRL and other related companies have dealt with the Constitutional Court, the regulator, the lender bank, its shareholders and other stakeholders.” ” Independent managers rejected FRL’s offer of financial support in January this year, citing the then-proposed sale to Reliance, Amazon said, adding that “it now appears that FRL wanted to isolate its retail outlets in favor of the MDA group. “You, as an independent director, have facilitated this deceptive tactic to deceive the Indian public and regulators,” it alleged.
Accusing independent managers of “total failure” in fulfilling their statutory obligations and duties, the US retailer said that “this tactic was carried out by FRL, its promoters, directors and KMPs as a result of your inaction and omission of material. Constitutional Court, The regulator, the lender bank and its shareholders are various stakeholders in collusion and collusion with the MDA Group.
“You, as an independent director of FRL, have also failed to fulfill your initial role as a gatekeeper and guardian for FRL’s public shareholders. The FRL, knowingly, made a false statement in court to carry out its strategy to commit this fraud, ”it alleged. “FRL, its promoter, director and KMP, through its fraudulent tactics, has isolated FRL’s retail outlets. You have failed to take any action to prevent fraud and instead you have helped and encouraged FRL to violate the binding orders and orders of the Constitutional Court of India. ” Amazon said FRL said in its 2020-21 annual report that it had sufficient current assets to meet lease obligations and pay off. Contrary to this statement, FRL revealed on February 26 that there was a “huge arrears” in the payment for access to the store premises.
“Clearly, the FRL’s February 26 disclosure is false because it contradicts the statement made in the FRL’s annual report,” it says.