The deal between Future Group entities and Reliance Retail is beneficial only to Kishore Biyani and his family and not to smaller shareholders, Amazon told market regulator Securities and Exchange Board of India (Sebi), according to a report by The Economic Times.
In a letter to Sebi, Amazon said that it is the statutory duty of the regulator to protect the integrity of the securities market and interests of the investors. It also urged the regulator to strike down the Rs 24,714 crore merger deal between Reliance and Future Group.
The point of contention raised by Amazon is that the merger will allow all assets listed under Future Group companies to be divested to Reliance Retail, a “restricted entity.” Future Group, itself, will cease to be an independent entity.
Without its core retail assets, the company’s growth prospects will get significantly curbed, the letter said. Amazon also noted that since the deal was announced in August, Future Retail Ltd (FRL)’s share prices have been falling.
“Had the impugned transaction really been in the interest of the shareholders, the price of the scrip would have risen post announcement of information,” the letter read. The Jeff Bezos-owned company added that after the announcement of the deal, the price "declined to less than 50% of its prior value, which is another indicator that the impugned transaction is detrimental to the interests of the shareholders of FRL."
Published 13 November 2020, 08:46 IST