Amazon’s internal communications, which show it misled CCI, are publicly disclosed by Future Retail
Future Retail Ltd’s independent directors have sent another letter to the Competition Commission of India (CCI), citing internal Amazon communications to establish Amazon’s contradictory statements before courts and the anti-monopoly body, and asking for the approval of the Amazon-Future Coupons deal to be revoked.
They accused Amazon of submitting “completely opposite information” that was “contradictory” to Amazon’s own internal discussions about the US business’s 2019 investments in FRL’s promoter company.
The letter, a copy of which the agency has reviewed, also claims that the US conglomerate planned to invest in FRL through proposed foreign portfolio investment.
On December 11, 2018, Amazon announced that it has reached an agreement to buy a 9.9% direct share in FRL. However, after the government released Press Note-2, which clearly prohibited a foreign firm from obtaining any share or control in a retail entity in India, this idea was buried.
According to the letter, this motivated Amazon to invest in the promoter firm, Future Coupons Pvt Ltd, rather than investing directly in FRL.
Amazon obtained a 49 percent share in FCPL through a “twin-entity structure” it negotiated. FCPL owned a 9.82 percent ownership in FRL and has its own digital loyalty cards, gifting, and couponing company.
The US retailer applied for and gained approval from Indian regulators, including the CCI, to invest in FCPL’s digital loyalty cards, gifting, and couponing.
It made no mention of its stake or rights in Future Retail Limited in regulatory filings, according to the letter, and if it had, the purchase would have been in violation of FEMA and FDI regulations in the country.
However, an email from Rakesh Bakshi, Amazon India’s Head of Legal and Assistant General Counsel, to Jeff Bezos allegedly exposes surprising facts about how Amazon saw and planned to enforce its agreements.