- Amazon sends legal notice to Kishore Biyani's Future Group over its recent deal with the Reliance Retail.
- Last year, Amazon acquired a 49% equity stake in Future Coupons Ltd. for around Rs 1,430 crore ($200 million).
- Amazon sends notice alleging that Future Group sold its logistics, retail, wholesale, and other business operations to Reliance Retail, breaching the non-compete contract.
E-commerce giant Amazon sends legal notice to Kishore Biyani's Future Group over its last month deal with the Reliance Retail.
Amazon sends legal notice alleging that Future Group sold its logistics, retail, wholesale, and other business operations to Reliance Retail for Rs 24,713 crore, breaching the non-compete contract.
In December 2019, E-commerce giant Amazon bought a 49% equity stakes in Future Coupons Ltd. for around Rs 1,430 crore and had signed a non-compete contract.
Amazon claimed that Future Group has violated the contract rights between both the companies when they entered into a deal In August with the Reliance Retail.
On August 29, Reliance Retail announced the acquisition of the Future Group retail, wholesale, logistics, and other business operations for Rs 24,713 crore. Yet the deal is awaiting the regulatory approvals.
A source told to PTI that Amazon has sent the legal notice to Future Group over its agreement with Reliance Retail.
According to the reports, Kishore Biyani had first approached Amazon for the acquisition of its Future Group business before defaulting to its Bankers, lenders, and suppliers.
“It was only after Amazon said no, that the Biyani group started talking to Reliance,” said, a person close to the agreement.
“The transaction was announced in August surprisingly, Amazon is taking a legal step now,” said, another person close to the agreement.
According to the Business Standard report, Amazon has already lost around Rs 1,400 crore ($193 million) in its Future Group investment.
"Amazon was not informed about the deal between the Future Group and Reliance Retail. Amazon has been reaching Future Group officials regarding the agreement, but no response," said, one of the Amazon executives.
"The deal between Future Group and Reliance Retail will incur losses in our Future Group investments," he added.
Kishore Biyani's Future Group subsidiary Future Consumer In July reported Rs 175 crore loss in the FY-20. Additionally, The COVID-19 lockdown badly impacted their offline business operations such as retail, wholesale, and warehousing. Since then, Future Group was looking for a buyer to sell their various business operations.
"The COVID-19 started impacting the performance towards the end of March leading to disruptions in sourcing, supply chain, and distribution impacted by store closures due to lockdown," said, Company in their presentation to its investors.
Responding to the legal notice, Future Group CEO, Kishore Biyani intended to settle this matter amicably, either through mediation or arbitration.
About Future Group - Future Group is an Indian conglomerate founded in 2013 by Kishore Biyani. Future Group owns Future Retail, BigBazaar, Hypercity, Future Generali India Insurance, and many more brands.
Future Group subsidiary has more than 1500 offline retail stores in 437 cities across the country.