Losing Case against Amazon, Hinders Future Retail's Shares

The Future Group has lost the case it had filled against Amazon in the Delhi High Court. However, losing its case has indeed resulted in its shares plunging 9.99 percent. Previously, the shares were trading at Rs. 55.85 at the time.

The debt-ridden Future Retail whose woes have further worsened during the COVID-19 pandemic has been taken over by Asia’s richest man Mukesh Ambani’s Reliance Retail. However, for more than six months the deal has been struck due to the legal cases with an opposition from e-commerce giant Amazon. In 2020, Future Retail’s share price has more than halved.

Lately, the Delhi High Court upheld the emergency arbitrator’s award favouring Amazon. The judgement was given by Justice JR Midha who stated that the Future Retail, Future Coupons, Kishore Biyani and others has violated the Emergency Award and has also questioned why they should not be detained in prison. Furthermore, the High Court also directed Future Group to approach authorities to recall all approvals being granted to Future Retail-Reliance deal.

Moreover, the court had also asked Biyani’s Future Group to place on record any action taken by it in connection with the Reliance deal after October 25, 2020, while also slapping an Rs.20 lakh fine on the company.

In a regulatory filing, Future Retail has stated that “this order does not come in the way of continuance of the ongoing NCLT proceedings”, as the issue is already in the Supreme Court. However, earlier in January 2021, Future Group had moved the National Company Law Tribunal (NCLT) seeking an approval to hold its shareholders meeting for the scheme of amalgamation with Reliance group.

The company states, “The Hon’ble Supreme Court, in its order in Amazon’s appeal, has not vacated the stay granted by the Hon’ble Division Bench (which stay is still in operation). The Hon’ble Supreme Court has directed that, in the meantime, the NCLT proceedings will be allowed to go on but will not culminate in any final order of sanction of scheme.”