Reasons for Suspended CCI 2019 nod : Amazon deal with Future Co.
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In this article the main highlights are suspended CCI 2019 nod for Amazon deal with Future co. India's antitrust body competition commission of India (CCI) on Friday said Amazon's 2019 deal with Future to remain in abeyance, citing US e-commerce major's failure to notify certain commercial arrangements as part of 2019 deal. The unprecedented step taken by CCI could have far-reaching consequences on Amazon's legal battles with now estranged partner Future. The US firm has for months successfully used the terms of its toehold $200 million investment in 2019 to block Future's attempt to sell retail assets to Reliance Industries for $3.4 billion.All disclosures contraventions arise from a deliberate design by amazon to suppress scope of 2019 Future deal, CCI said. Amazon suppressed the actual purpose and particulars of 2019 deal, the watchdog further stated. In a 57-page order, the CCI said it considers "it necessary to examine the combination (deal) afresh," adding its approval from 2019 "shall remain in abeyance" until then. Amazon had "suppressed the actual scope" of the deal and had made "false and incorrect statements" while seeking approvals, the CCI order added. "The approval is suspended. This is absolutely unprecedented," said Shweta Dubey, a partner at Indian law firm SD Partners, who was formerly a CCI official. "The order seems to have found new power for CCI to keep the combination approval in abeyance," she added. Amazon will be given time to submit information again to seek approvals, the CCI added. Future and Reliance did not respond to a request for comment. Amazon said it is reviewing the order "and will decide on next steps in due course." The 2019 Future deal approval being put on hold could dent Amazon's legal position and retail ambitions, while making it easier for Reliance - the country's largest retailer - to acquire number two player Future, people familiar with the dispute said. Amazon has argued that terms agreed in its 2019 deal to pay $200 million for a 49% stake in Future's gift voucher unit prevent parent, Future Group, from selling its Future Retail Ltd business to certain rivals, including Reliance.
But after Future complained to the CCI that Amazon had concealed facts, the CCI in June sought explanation from Amazon saying it hid factual aspects of the transaction http://reut.rs/3I1MJ4r by not revealing its strategic interest in Future Retail while seeking approvals.
Author: CA. Dr. Gaurav Bhambri
Category : Corporate Law | Comments : 0 | Hits : 3627
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