NEW DELHI: India’s Supreme Court has stopped regulatory approval for the Future Group’s $3.4 billion asset sale to Reliance Industries Ltd., delaying the deal in a boost for Amazon.com Inc., which wants to scuttle the transaction in its bid to dominate the country’s retail sector.
The order led Future Retail shares to dip 5% to Rs 71, while Reliance Industries shares were trading down 2.57% at Rs 2,027 in a weak Mumbai market on Monday.
Amazon appealed to the Supreme Court this month against Future Group’s sale to market leader Reliance Industries, accusing its partner of violating contracts by agreeing to the sale. Hearing the American e-commerce giant’s petition, the Supreme Court on Monday overturned the Delhi High Court order that allowed the deal to go through.
The latest verdict restores the legal advantage for Jeff Bezos-founded Amazon that secured an interim stay on the deal from a Singapore arbitration tribunal in October after accusing the Future Group of violating a partnership contract when it agreed to sell assets to billionaire Mukesh Ambani’s conglomerate last year. The Monday order, however, endangers Future Retail Ltd., which is struggling to pay debt and has warned of insolvency.
Future Retail will have to file its reply in 3 weeks, while Amazon will get two weeks to file its counter reply. The case is likely to be listed for hearing before the top court in the last week of March.