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    Reliance Industries shares fall after Supreme Court verdict on Amazon-Future Group tussle

    Reliance Industries shares fall after Supreme Court verdict on Amazon-Future Group tussle

    Reliance Industries shares fall after Supreme Court verdict on Amazon-Future Group tussle
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    By Sandeep Singh   | Yashi Gupta   IST (Updated)


    In afternoon deals, RIL shares traded 1.95 percent lower at Rs 2,091.70 apiece on the bourse, underperforming the benchmark S&P BSE Sensex index, which was down 0.23 percent amid choppy trade.

    Reliance Industries shares fell 2 percent on Friday after the Supreme Court ruled in favour of Amazon in a dispute with Future Retail. The top court ruled that Future Retail's Rs 24,731 crore deal to sell its retail assets to Reliance Industries was bound by an arbitrator's order that put the transaction on hold.
    The verdict comes nearly a year after Reliance Industries subsidiary Reliance Retail announced the acquisition of Future Group’s retail, wholesale, logistics, and warehousing business for Rs 24,713 crore in August 2020. Amazon had objected to the deal in multiple courts.
    RIL shares ended 2.07 percent lower at Rs 2,089.05 apiece on BSE, underperforming the benchmark S&P BSE Sensex index, which ended a record-breaking streak with a loss of 0.39 percent.
    Future Group stocks took a beating too. Future Consumer, Future Lifestyle, Future Enterprises, Future Retail and Future Supply Chain closed up to 10 percent lower.
    Future Retail is likely to move the Delhi High Court to challenge the order of Emergency Arbitrator.
    In August 2019, Amazon had picked up a 49 percent stake in Future Coupons for Rs 1,500 crore. Future Coupons holds a 7.3 percent stake in Future Retail, giving Amazon an indirect stake in Future Retail through the deal.
    It also gave Amazon a call option allowing it to buy a controlling stake in Future Retail, starting from three years from the deal up to 10 years.
    The deal further barred the company from entering into share sale agreements with 15 companies including Reliance, Walmart, Google, Paytm, Swiggy and Zomato.
    So, when Reliance Retail announced buying Future Group's retail and other business, Amazon took an objection and moved the Singapore International Arbitration Center (SIAC) in October 2020. Amazon won an interim award in its favour with Emergency Arbitrator, halting the Future Group-Reliance Retail deal.
    Following this, Future Retail moved Delhi HC alleging interference by Amazon. It maintained that it was not a party to the deal between Future Coupons and Amazon. The high court, however, refused to stay the deal between Amazon and Future Group. But then, Amazon challenged the order in the high court.
    Thereafter, a single judge bench ordered status quo, which was contested by Future Retail. The court ended up lifting the status quo.
    In the meantime, India's competition watchdog CCI, capital market regulator SEBI, and both major exchanges NSE and BSE gave a nod to the deal.
    That's when Amazon moved the Supreme Court alleging Future Retail was in breach of contract by entering into a deal with Reliance Retail.
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