Call it a business done in a bad faith or Future’s debt woes leading to its exacerbated woes but the current scenario of the future- Amazon fiasco has escalated more than Kishore Biyani would have liked it to. The adamant stance of the Kishore Biyani led Future can be scrutinized, given that it has again approached the apex court against orders that were recently passed by the Delhi High Court.
The decision by the Delhi high court was to effectively maintain the status quo in relation to its deal with the Reliance that amounted to a whooping Rs 24,713 crore. This came after a similar order was effectively passed by the Singapore-based Emergency Arbitrator that had ordered a stay in the matter. Thus, the Delhi High court effectively enforced a similar Singapore- based Arbitration order.
Future Retail, in its regulatory filing, had effectively maintained that the company had filed for a special leave petition.
The extreme emergency of the Future Retail
The future retail group has specifically mentioned that the company is suffering from an extreme urgency. It described Delhi high court’s stay Orders to be crippling, citing that it can quite detestably lead to the company’s liquidation.
But why is Future Retail so adamant on its claim and effectively approaching the Supreme court for redressal time and again? It is due to the emphatic fact that Future Retail’s scheme of amalgamation with the Reliance cannot go forward or can be listed before the NCLT due to the orders of the High Court.
Several other consequences for the detestable stay have been provided by experts and analysts. The first reason in favor of the deal is that the scheme of amalgamation was an effective chance for the ultimate benefit of all the stakeholders of the company. These benefits were to be incurred pompously by the public at large and public sector banks that might actually fall through.
Secondly, the argument that is is being given is that if the deal doesn’t go through, it would be quite inevitable for the FRL to save itself from liquidation due to its exacerbated debt woes.
On the other hand, there is much at stake if the debacle of the FRL materializes. These losses would include approximately a whopping Rs 28,000 crore of public money that is in the effective form of bank loans and debentures that were issued by FRL.
Secondly, many of its group companies will also come at risk if the deal doesn’t go through. Thus, it can be rightfully stated that the magnitude of the damage will be immense that will reach the public, and will affect the livelihood of many.
Additionally, unemployment will be a major consequence of the debacle of the FRL. According to the estimates more than 35, 575 employees of FRL will go unemployed. This will be in detestable addition to unemployment in promoter companies that are an effective part of the Scheme.
What is worth mentioning here is that given the already exacerbated woes of the Indian employment market, it is quite simple to note that such a debacle leading to large-scale unemployment cannot be afforded at the moment. As the economy is in its nascent stage of recovery, unemployment on large scale with invariable loss to the public, related companies, etc. will only dig the grave of the recovering economy.
Thus, the debacle of Future retail will effectively present the detestable and odious situation of the solvency of over 8,050 SMEs and the snatched livelihood of their employees.
The long drawn case of Future retail
It is to be noted that the Future retail scheme effectively entails robust consolidation of Future Group’s wholesale and retail business. The scheme additionally also includes the consolidation of the logistics and warehousing business emphatically and effectively into one entity Future Enterprises Ltd. According to the plan of action, consequently, it is to be then transferred to Reliance Retail Ventures Ltd.
Though the deal has to be partnered with Reliance, the deal has been vehemently contested by Amazon. It is to be noted that Amazon is a strategic investor in Future Coupons and is a prominent shareholder in FRL.
Amazon, in a series of steps to counter the deal, had approached the Singapore International Arbitration Centre. Here, an Emergency Arbitrator, in October, had restrained the Future group deal with the reliance industry to go forward.
Further, the matter was dragged to the Delhi High Court. Here too in February, a single bench of Justice J R Midha had emphatically and effectively directed Future retail to maintain the status quo and had enforced the order by the Singapore Arbitration court.
According to the court, the interim order that had been passed was actually required to be passed to effectively protect the rights of Amazon.
Later in March, the court had emphatically upheld the Singapore Emergency Arbitrator’s order. This had strategically and effectively had restrained Future Retail from going forward with the Rs 24,713 crore deal.
In fact, reportedly, the court had ordered the Retail group to not move forward with the deal as it appeared in violation of the EA’s order. Subsequently, the high court had rejected all the objections that were being strategically raised by the Future Group. But Future Retail’s adamant, persistent demand led to the imposition of a Rs 20 lakh fine on it as well as its directors.
Thus, cutting short the arduous predicament of the Future Retail group, it currently is appealing in the Supreme court against the interim judgments that were passed in the month of February by the high court.
Thus, what will the future hold for the future- reliance relationship is still an ongoing odious long drawn battle. What will happen next, is a mystery.
Edited by Sanjana Simlai.