Bombay : Amazon Inc. has written to the Reserve Bank of India (RBI) and Future Group lenders, alleging repeated collusion by Future Retail Ltd (FRL) and banks to deny its rights.
FRL should not be allowed to start bankruptcy proceedings as it would further affect its rights, the online retail giant said in a letter that was seen by Mint.
In the letter, Amazon reiterated its request for a forensic investigation into FRL’s alleged misconduct.
“It is the duty of banks in India, specifically public sector banks, to ensure the fulfillment of fiduciary duty to the public. However, FRL’s lending banks acted in a completely irresponsible and collusive manner, despite having knowledge of FRL’s illegal actions. Thus, this letter is issued requesting that a forensic investigation be conducted regarding these collusive actions by the FRL and all of its lending banks,” Amazon said.
Amazon alleged that FRL was attempting to initiate a corporate insolvency resolution process through the Bank of India in order to utilize the provisions of Section 14 of the Insolvency and Bankruptcy Code to seek an unlawful injunction in the arbitration and ongoing litigation involving Future Retail.
Thus, the insolvency petition was deliberately filed by FRL in conjunction with the lenders and such actions should not be permitted, Amazon argued. Statutory authorities must hold lending institutions accountable for their “malicious conduct” and take appropriate action, he said.
The letter stated that despite its pre-existing rights, if the unlawful and malicious insolvency proceedings of the lending banks against FRL are permitted, there will be no liability for FRL’s retail assets.
This referred to Reliance Group’s takeover of Future Retail’s assets. Reliance Projects & Property Management took possession of around 800 Future Group stores in February, saying Future had failed to pay the rents of ₹4,800 crore for over a year.
Amazon also alleged that FRL’s collaboration with its lenders to sell the former’s smaller store formats through a framework agreement was part of a larger program to transfer or divest FRL’s retail assets. to the Reliance group. As part of the deal, FRL had offered to sell the small-format stores to raise approximately ₹3,000 crores to pay off the debt.
The deal was not the result of financial hardship and the banks participated in these actions despite having knowledge of such actions by FRL, Amazon alleged.
Amazon’s petition in the Delhi High Court seeks enforcement of an order by a Singapore-based arbitration tribunal that suspended the sale of Future Group’s retail assets to Reliance Retail.
“The alleged launch of insolvency resolution proceedings by the Bank of India is the latest attempt to whitewash the fraud that has been committed not only on Amazon but also on statutory regulators, thousands of retail investors and investors. other stakeholders. Such conduct, including on the part of the lending banks, establishes that the banks gave a reprieve to FRL by putting it into bankruptcy without seeking the responsibility of the promoters, the members of the board of directors and the direction of FRL, and conducting a proper investigation,” Amazon said.