Amazon flags Future Retail’s independent directors’ conduct as corporate governance lapse
The Hindu
E-com firm asks independent directors to conduct investigation into alleged fraud
E-commerce major Amazon alleged that independent directors of Future Retail had failed to exercise their statutory duties and that their ‘conduct and attitude’ raised substantial questions on accountability, transparency and the fairness regime for corporate governance in India.
In a strongly-worded letter to Future Retail's independent directors on July 4, Amazon has also raised objection to an alleged attempt by the Future Group to transfer its logistics and warehousing business to Reliance in violation of binding legal orders.
In August 2020, Future Group had announced a ₹24,713-crore deal to sell 19 companies operating in retail, wholesale, logistics and warehousing segments to Reliance Retail Ventures Ltd (RRVL).
However, the deal could not go ahead as secured creditors of the Future Group had voted against it after continuous scrutiny by judicial forums, including the Supreme Court, the Delhi High Court and the NCLT. Besides, Amazon had moved the Singapore International Arbitration Center against the deal.
In the latest letter to independent directors of Future Retail, Amazon said, "You, the Independent Directors of FRL, have failed to exercise your statutory duties and functions independently in accordance with law. Moreover, you have failed to safeguard the interest of shareholders, and have in fact facilitated commission of fraud perpetuated by FRL and the MDA group (Reliance).
"Your conduct and attitude, as the Independent Directors of FRL, raises substantial questions on accountability, transparency and fairness regime for corporate governance in India," Amazon said.
An email query sent to FRL and Reliance did not elicit any reply on the matter while Amazon declined to comment.