Future was responding to queries from the exchanges on whether the company had made adequate disclosures to shareholders about the global e-commerce giant’s attempts to block the deal.
The proposed $3.4 billion deal between Future Retail and Reliance Industries would need a go-ahead from both Sebi and stock exchanges.
“A contractual dispute between the promoters of FRL (Future Retail) and Amazon cannot restrict or interfere with the authority of SEBI and the stock exchanges to approve the Scheme involving the listed entity,” Future said in a response to stock exchanges. “To be clear, the EA (Emergency Arbitrator) Order cannot and does not in any manner restrict SEBI or the stock exchanges from considering and approving the Scheme.”
Future Retail is locked in a legal battle with Amazon after the latter moved the Singapore International Arbitration Centre (SIAC) which issued a temporary injunction against the Future-Reliance deal. Amazon claims that it has a pre-existing agreement with the promoters of Future Retail which prohibits the company from offering shares to a particular set of rivals including Reliance Industries.
Stock exchanges had sent queries to Future Retail earlier this month inquiring about the interim arbitration award and whether the award was disclosed to shareholders in a timely manner. In response, Future Retail said Amazon has painted a picture that its public shareholders are being misled.
“It is a bit rich for such an argument to be made from someone who is not even a shareholder in FRL. Evidently, Amazon’s letter is motivated by other considerations,” the company said in the letter.
Future said such an emergency arbitration award cannot be a hurdle in getting the scheme of arrangement approved under Sebi rules, since the company had followed due procedure including obtaining broad resolutions and shareholder approvals.
Earlier Amazon had accused Future Retail of flouting disclosure norms since the company did not disclose the SIAC order. According to experts, the key point is whether the information about the SIAC order was a material development or not.
Sebi rules on the issue are very broad-based and leave the onus on the boards of the companies to decide if a development is considered material or not.
“The aforesaid information (SIAC order) is not material and accordingly, was not required by the Company to be disclosed,” the company said. “It may also be noted that the decision about materiality has been taken by the Company based on based on information furnished by the FRL promoters and from the information available with the company.”
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