Enforcement Directorate (ED) has summoned Amazon India Chairman Amit Agarwal next week on alleged irregularities in the deal with Future Group CNN-News18 Reported on Sunday.
“We have received the summons issued by the ED in respect of Future Group. As we have just received the summons, we are investigating it and will respond within the given time frame,” Amazon said in a statement.
According to sources, the federal agency has summoned the officials of Future Group to verify the documents and the evidence gathered so far. The company did not respond to questions till press time.
The ED is probing whether Amazon violated India’s law on foreign exchange, or the Foreign Exchange Management Act (FEMA), when it bought a 49 per cent stake in Future Coupons Pvt Ltd (FCPL) in 2019. 1,431 crore and whether it was complied with? Regulations.
FCPL holds 9.82 per cent stake in Future Retail Limited (FRL). The deal not only allowed Amazon to indirectly own a 4.81 percent stake in Future Retail, but also gave it effective veto power over the listed retail company. Amazon is claiming controlling rights over Future Retail in various judicial fora and accusing it of violating the investment agreement by objecting to the sell-off plans of Kishore Biyani-led Future Group.
Amazon and Future Group are engaged in an uphill battle after Future agreed to sell its assets to Mukesh Ambani’s Reliance Group on the basis of a drop of Rs 24,500 crore last year.
Earlier, the Delhi High Court observed that Amazon had indirectly gained control over Future Retail without the approval of the government.
On November 16, the HC directed the Competition Commission of India (CCI) to revoke its approval to the Amazon-Future Coupons deal within two weeks, the Confederation of All India Traders (CAIT) said in a statement.
This comes after offline merchants’ lobby CAIT filed a PIL against CCI, saying the competition regulator had issued a show-cause notice to Amazon in June, but has not taken any decision yet. It was earlier reported that CCI will meet Amazon and Future Coupons Pvt Ltd (FCPL) on January 4, 2022.
Independent directors of Future Retail Ltd have also written to the CCI twice in the past few weeks, seeking cancellation of the approval granted to the US giant’s 2019 investment in Future Coupons, the promoter group arm of Future Retail.
He accused Amazon of submitting “completely contrary information” while seeking approval from the CCI, which was “contradictory” to the US company’s own internal communications regarding the 2019 investment in the promoter company of Future Retail.
Disclaimer:Network18 and TV18 – the companies that operate News18.com – are controlled by the Independent Media Trust, of which Reliance Industries is the sole beneficiary.
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