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Amazon-Future-RIL saga: US retailer launches fresh attack

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Amazon-Future-RIL saga: US retailer launches fresh attack

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Amazon's outcry comes even though on March 3, it offered to hold talks, raising hopes of stakeholders the dispute could be resolved.

Amazon-Future-RIL saga: US retailer launches fresh attack
Amazon.com has attacked Future and Reliance in a long fight to retain a hold in the Indian retail market. In newspaper advertisements, the US retail giant has accused the two Indian retailers of fraud after Reliance took over many Future Retail stores.
Amazon contests the Rs 24,713 crore sale of Future Group's retail assets to Reliance in 2020. The case is before the Supreme Court. Late last month, Reliance took over the operations of Future Retail stores and offered jobs to its employees. Stores are now being rebranded under the Reliance Retail label.
Amazon's "public notice" in Indian newspapers on Tuesday said: "These actions have been done clandestinely by playing a fraud on the constitutional courts in India." Amazon's outcry comes even though on March 3, it offered to hold talks, raising hopes of stakeholders the dispute could be resolved.
The takeover of Future Retail stores came after the firm acknowledged that it had been finding it challenging to finance working capital needs in an exchange filing. Many employees and vendors were not receiving salaries for months, and rental dues were delayed for years.
Once a pioneer in the industry, Future Retail's acute financial troubles increased during the pandemic's closures. In August 2020, Future negotiated to sell its retail assets to Reliance. At the time, the outstanding to creditors and landlords exceeded Rs 6,000 crore. This was when Amazon moved several judicial forums against the deal, citing another agreement with Future.
The long-drawn legal tussle made it harder for stores to carry on business as usual amid the pandemic, creating payment uncertainties and delays for employees and landlords and hit vendor businesses.
Despite getting support from Reliance, Future Retail incurred over Rs 4,445 crore losses during the calendar year 2021. Sources said that to help Future Retail contain losses, Reliance exercised its rights to control and manage the loss-making stores. According to sectoral experts, had the situation persisted, Future Group would have plunged into insolvency.
Disclosure: Network18, the parent company of CNBCTV18.com, is controlled by Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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