The National Company Law Tribunal (NCLT) on Monday allowed Reliance Retail Ventures Ltd (RRVL) and Reliance Retail & Fashion Lifestyles Ltd (RRFRL) to hold extraordinary general meetings of their shareholders and creditors to acquire Future Group’s businesses.
NCLT said the objections raised by the American e-commerce giant Amazon are premature and can be dealt with at a later stage. On September 28, the NCLT had allowed six Future Group companies to hold the meetings of their respective shareholders and creditors.
Lawyers said the NCLT permission to hold the meeting is only a preparatory step and not a final decision for acquisition, which is still subject to the decision of the Supreme Court. “I do not see any major departure from the orders in the proceedings inter se Amazon and Future Retail,” said Sameer Jain, Managing Partner, PSL Advocates & Solicitors, a Delhi-based law firm.
In August last year, RRVL, a subsidiary of Reliance Industries, announced that it is acquiring the entire retail, wholesale, logistics and warehousing businesses from the Future Group for Rs 24,713 crore. As per the regulations, all mergers and acquisitions require court’s approval and hence both Reliance companies had approached NCLT for its clearance.
While the Future Group companies will hold their EGMs from November 10-14, RRVL and RRFL will hold their EGMs on November 30, said a source close to the development.
The NCLT’s final clearance to the deal will be subject to the Supreme Court’s order where both Future Retail, a Future Group company, and Amazon are litigating.
After Reliance Retail and Future Group announced their dea in August last year, Amazon, which holds 49 per cent stake in a holding company of Future Retail Ltd, objected to the deal saying the transaction breaches its non-compete agreement with Future Group’s promoters.
Amazon later moved the Singapore International Arbitration Centre (SIAC) which, in an interim order, restrained the transaction. Future Retail later moved the Delhi High Court, which held that there was no arbitration agreement between Amazon and the company. Amazon moved the division bench of the Delhi High Court which ordered a status quo. The matter is now pending in the Supreme Court which has asked both parties to wait for the final order from the SIAC.
As per the plan, various Future group companies — Future Retail Limited, Future Consumers Limited, Future Supply Chain Solutions Limited Future Lifestyle Fashion Limited, Future Brands Limited and Future Market Network Limited — will first merge into Future Enterprises Limited.
Subsequently, the retail & wholesale undertaking will be transferred to Reliance Retail and Fashion Lifestyle Limited (RRFLL), a wholly-owned subsidiary of RRVL. At the same time, the logistics and warehousing undertaking will be transferred to RVVL. Future Enterprises would be left with just few businesses, including two insurance joint ventures.