new Delhi: According to a Reuters report, Reliance Industries (RIL) in a letter defended its move to suddenly take over debt-ridden Future Retail’s stores.
In the letter, the group said that mounting dues of $634 million forced it to act beyond expectations.
However, the Supreme Court will decide whether Reliance or US e-commerce major Amazon will eventually acquire Future Retail’s assets in the race for the $900 billion retail space that sparked a bitter dispute between RIL and Amazon.
The letter, sent on March 8, revealed RIL’s stand on the events of the night of February 25, when its employees suddenly appeared to control missed lease payments at several Future stores.
That sudden move by RIL stunned not only Future but also Amazon, which has already locked horns in arbitration with Future.
Future Retail, which is staring at bankruptcy as its losses widen, has earlier called RIL’s move “draconian and one-sided”.
Amazon has cited breaches of certain contracts to legally block, from 2020, a $3.4 billion deal between the two Indian retail majors.
Future and Amazon are engaged in a long-running dispute, which is being heard by a Singapore-based arbitration panel. However, both the parties are fighting parallel cases in Indian courts to enforce or annul certain decisions taken by the arbitrator.
According to the letter, RIL said it went “well and truly beyond expectation” to keep the future “out of harm’s way”, as it took “significant steps” to ensure business continuity in the future. And made sure there were “no hindrances” to their deal.
The report noted that these steps included financial assistance of Rs 4,800 crore ($ 634 million), including unpaid lease rent of Rs 1,100 crore and working capital of Rs 3,700 crore.
After Future proved unable to pay dues and losses in its retail operations increased, RIL faced “compelling circumstances” and decided to exercise its legal right to take over the stores, the letter said.
So far, RIL had leased over 900 of Future’s 1,500 stores in months, while still allowing the company to operate them.