Amazon's internal emails show it misled CCI
Independent directors (IDs) of Future Retail Ltd have shot off another letter to the Competition Commission of India (CCI), citing internal communications of Amazon to establish its contradictory statements before courts and the anti-monopoly body and sought revocation of nod to Amazon-Future Coupons deal.
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New Delhi: Independent directors (IDs) of Future Retail Ltd have shot off another letter to the Competition Commission of India (CCI), citing internal communications of Amazon to establish its contradictory statements before courts and the anti-monopoly body and sought revocation of nod to Amazon-Future Coupons deal.They accused Amazon of submitting 'completely opposite information'' which was 'contradictory' to Amazon's own internal communications regarding the US giant's 2019 investments into FRL's promoter company.
The letter also says that the US giant was initially planning to pump money into FRL through a proposed foreign portfolio investment.On December 11, 2018, Amazon had finalized an agreement to acquire a 9.9 per cent direct stake in FRL. However, this plan was buried soon after Press Note-2 was issued by the government, which specifically barred a foreign entity from acquiring any stake or control in a retail entity in India.
That prompted Amazon to invest in the promoter firm, Future Coupons Pvt Ltd rather than directly infusing capital into FRL, the letter said.Amazon negotiated a 'twin-entity structure', through which it acquired a 49 per cent stake in FCPL. FCPL had its own digital loyalty cards, gifting and couponing business, and also held a 9.82 per cent stake in FRL.
The US retail giant sought and received approval from Indian regulators, including CCI, for making an investment in the digital loyalty cards, gifting and couponing of FCPL. Nowhere did it mention in regulatory filings its interest or rights in Future Retail Ltd, the letter said adding had it disclosed its intent to acquire control over FRL, the deal would have runafoul of FEMA and FDI laws in the country.
However, an email from Rakesh Bakshi, Head, Legal and Assistant General Counsel, Amazon India, to Jeff Bezos reveals the startling details on how Amazon viewed and planned to enforce its agreements, the letter claimed.It said Bakshi's email stated that due to foreign investment policy restrictions, Amazon will use a 'twin-entity investment' structure to invest in FRL.
