Saturday , September 25 2021

EXCLUSIVE Indian security guard accuses Amazon of hiding facts in Future Group deal



A man walks over an Amazon logo outside the company collection point in Mumbai, India, March 19, 2021. REUTERS / Francis Mascarenhas

  • India’s antitrust guardian threatens Amazon with nice action
  • Amazon has not yet responded to the antitrust announcement
  • The CCI says Amazon has made different statements in other legal forums

NEW DELHI, July 22 (Reuters) – India’s antitrust regulator has accused Amazon.com Inc. (AMZN.O) of hiding facts and making false remarks when it requested approval for a 2019 investment in a Future Group plant, a letter to US e – the business giant seen by Reuters showed.

The letter complicates Amazon’s bitter legal battle with the Future Group over the Indian company’s decision to sell its retail assets to Reliance Industries (RELI.NS) – a matter now before the Supreme Court of India.

Amazon claims that the terms agreed in the 2019 agreement to pay $ 192 million for a 49% stake in Future Gift Unit prevent Future Group parent company from selling Future Retail Ltd (FRTL.NS) to Reliance .

In a letter dated June 4, the Competition Commission of India (CCI) said that Amazon hid the real aspects of the transaction, not revealing its strategic interest in Future Retail when it sought approval for the 2019 deal.

“Amazon’s representations and conduct before the Commission are tantamount to misleading statements, making false statements and suppressing and / or concealing important facts,” the letter said. He also noted that the review of the submitted submissions came from a complaint from the Future Group.

In a four-page letter, a so-called “cause notice,” the CCI asked Amazon why it should not take action and punish the company for providing false information.

Amazon has not yet responded, according to a source with immediate knowledge of the matter who declined to acknowledge that the letter has not been made public.

Amazon told Reuters in a statement that it had received a letter, pledged to comply with Indian law and would extend its full co-operation with the CCI.

“We are confident that we will be able to address the CCI’s concerns,” he said.

Representatives for the future and the CCI did not respond to requests for comment by Reuters.

Vaibhav Choukse, a competition expert and partner at J. Sagar Associates, said it was rare for the CCI to issue such a notice and that if the CCI was not satisfied with Amazon’s response, it could result in a fine and even in review the agreement.

“The CCI has a wide range of responsibilities, including instructions for re-applying for approval and even withdrawing approval under exceptional circumstances,” Choukse said.

The CCI approval mandate for 2019 states that its decision “will be revoked if, at any time, the information provided” is found to be incorrect.

Shares in Future Retail rose after Reuters published details of the letter, extending earnings to nearly 5% on Thursday afternoon.

COMPARISON OF SUBMISSIONS

The controversy over Future Retail, which owns more than 1,500 supermarkets and other stores, is the most hostile point of contention between Amazon Bezos and Reliance, led by India’s richest man, Mukesh Ambani, as they try to win the lead by winning the country Consumers.

Amazon also has many other challenges in India, a key growth market where it has invested $ 6.5 billion, including a separate CCI investigation into alleged practices that small businesses say have hit them hard. read more

In addition, it faces the prospect of more regulations restricting the sale of private labels and barring the US company from allowing its subsidiaries to post products on its website. read more

The CCI letter compared three sets of submissions submitted by Amazon in 2019 to submissions later made to other legal forums, saying they were “contradictory”.

In particular, he said, Amazon explained its interest in investing in the Future coupon unit as one that would address gaps in India’s payment industry. However, the letter stated that Amazon had revealed in other legal forums that the basis of its relationship with the Future Coupon were certain special rights acquired through Future Retail.

“Amazon has concealed its strategic interest” in Future Retail, the letter said, adding: “This interest and the purpose of the merger … was not disclosed to the Commission despite the specific requirements.”

The CCI also objected to a part of a submission in which Amazon had told the regulator that it had nothing to do with a specific legal agreement that two future entities had signed with each other days before the 2019 agreement. However, Amazon later claimed before the arbitrator that the agreement was “complete part” of the transaction, the letter said.

Report by Aditya Kalra in New Delhi? Additional references by Abhirup Roy. Edited by Edwina Gibbs

Our role models: The Thomson Reuters Trust Principles.


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