Sr. Advocate Harish Salve told Delhi Court that Amazon has deliberately mischaracterized the Future Retail Limited group (FRL) suit in such a manner as to confuse the court. He read many facts of the plaint that established how Amazon is trying to stultify FRL’s efforts to salvage its current crisis. He also added that amazon’s attempt in writing various letters to authorities on back of Emergency Arbitrator’s Interim Award gives sufficient cause of action. He argued that in such circumstances, FRL is absolutely entitled to relief of injunction in this suit.
“As regards the transaction with Reliance, there’s a scheme which proposes to demerge certain FRL entities as a first step before the proposed slump sale to Reliance, and it would suffice to give the details thereof and there’s no need to provide any agreement etc.,” Salve argued.
Salve said that the case is amazon’s own and there’s transaction to which FRL is a party, and that is in breach of the FCPL SHA. On the FPI/FDI policy meaning for Amazon, Salve argued that firstly, Amazon chose not to do its investment through the FPI/FDI route. FPI investment is relevant only for passive investors.
FDI in FRL would have meant prior government permission since FRL is engaged in MBRT. FPI is allowed only up to 10 percent – assumed that Amazon’s claim to minority rights (less than 5 percent) in FRL were to be reckoned, it cannot in any manner seek to control the decision making process (including exercising of voting rights) of the majority stakeholders, all through contractual restraints.
Secondly, admittedly Amazon is not a shareholder in FRL, but it now seeks to claim more rights than that of a promoter/shareholder etc. Amazon’s investment through FCPL was its own conscious decision.
Salve argued that Amazon’s change in stance is motivated with vested interest – it purportedly seeks to protect its investment – but, the entire proceedings are aimed at pushing FRL into bankruptcy.
In contradiction to amazon’s claim he said that Clause 15.17 of FCPL SHA categorically claims that Amazon’s investment is not in FRL and it does not seek any control over FRL.
As regards the independent status of the FRL SHA and FCPL SHA, even on scope of restricted persons, FRL had reserved its rights to review and decide on the list, as mutually agreed with FCPL on an annual basis, therefore, FRL was within its rights to do the transaction with Reliance, so long as FCPL had consented to it.
Relying on two English cases salve argued that notwithstanding any of the diktats, directors’ role/decisions are always mandated to be in the interest of the company. The court has now adjourned the matter to November 19.