NOVEMBER 25, 2021
NEW DELHI: US e-tailer Amazon has written to independent directors at Big Bazaar parent Future Retail (FRL), alleging financial irregularities at the Kishore Biyani-led company.
The November 24 letter, reviewed by TOI, comes close on the heels of FRL directors accusing Amazon of misrepresenting facts and alleged FEMA and FDI violations. Amazon and FRL are fighting several legal cases over the latter’s proposed Rs 24,700-crore sale of assets to Reliance Retail Ventures, the retail arm of Reliance Industries.
Calling Amazon’s letter an “after-thought”, an FRL spokesperson said, “All related-party transactions and records of fund utilisation are on record and part of the public disclosures made by the company as part of standard governance practices. There is nothing new that is being brought to the notice, except for false speculation being created out of selective excerpts from these documents.”
The FRL board had formed a Crisis Management Committee to deal with the situation arising out of the Covid lockdown and its related impact. “Various questions were raised by the committee from time to time and these were clarified through detailed explanations by the management, with supporting documents and presentations to their satisfaction, as well as through special audits wherever required.”
Quoting FRL’s increase in debt in 2019-20, Amazon said audit committee members have “expressed concerns about financial management of FRL, including related-party transactions…” On account of the substantial debt of Rs 6,000 crore raised during 2019-2020, FRL’s net debt grew from approximately Rs 2,554 crore to Rs 8,762 crore within a span of only one year, said Amazon. The e-tailer urged the directors to investigate several transactions made by the group. Amazon highlighted that “FRL has consistently entered into ‘significant related-party transactions’ with various Future Group entities…”
“During the FY 2019-2020 (around March 2020, i.e. the time of onset of Covid-19 pandemic), FEL, a company controlled by the Biyani family, received a capital advance from FRL amounting to INR 3,560,00,00,000/- (Indian Rupees Three Thousand Five Hundred and Sixty Crores),” said Amazon in the letter.