MUMBAI: At a large Future Retail supermarket in Mumbai last week, workers were unloading hundreds of bright blue grocery crates belonging to India’s biggest retailer Reliance.
Prospective customers were turned back by security, disappointed at the closed state of the store that still carries the signage of Future’s biggest brand, Big Bazaar, but which will likely soon be rebranded as a Reliance outlet.
Across India, similar scenes are being played out as Reliance Industries India’s biggest conglomerate run by Mukesh Ambani, the country’s richest man, presses ahead with a shock de facto takeover of prized retail real estate that Amazon.com Inc has been keen to take part-ownership of.
The high-profile bitter dispute between corporate titans in which Amazon has sought to block Reliance’s planned $3.4 billion purchase of Future Group’s retail assets is currently before India’s Supreme Court.
Reliance’s takeover began with utmost stealth on the night of Feb. 25 when its staff began arriving at Future stores. Many in Future’s management were in the dark about the plans as store employees from all over the country frantically began to call, according to people with direct knowledge of the matter.
“It was tense, everybody was panicking. We didn’t know who they were. They wanted access and seniors didn’t know about it,” a New Delhi Big Bazaar store employee said, describing what happened around 8 p.m. that day.
At a Future store in Sonipat town in northern Haryana state, announcements were made asking customers to leave as Reliance seized control, one source said. In Vadodara in western Gujarat, Future employees arriving for work the next morning were asked to go back home with no explanation, said another source.
Citing unpaid payments by Future, Reliance has taken control of operations of some 200 Big Bazaar stores and has plans to seize another 250 of Future’s retail outlets. Combined, they represent the crown jewels of Future’s retail network and around a third of all Future outlets.
Although Reliance had not played a large public role in the legal dispute, it had, according to sources, for some months assumed many of the leases held by cash-strapped Future, India’s No. 2 retailer and Amazon’s estranged business partner.
Reliance’s sudden possession of the stores appears to have landed what some analysts are calling a coup de grace that spoils Amazon’s chances of untangling the transfer of Future’s assets to Reliance. That’s despite a series of legal battles won by the U.S. e-commerce giant to date blocking the 2020 deal announced between the two Indian companies.
“What will Amazon fight for now?” said a source close to the U.S. company with knowledge of the legal dispute. “The shops are gone.”
Representatives for Reliance, Amazon and Future did not respond to Reuters queries for this article. Sources asked not to be identified due to the sensitive nature of the dispute.
AFTER THE TAKEOVER, TALKS
Future Retail said on Feb. 26 it was “scaling down its operations” to cut losses although it made no mention of Reliance in its statement. Future Group as a whole has more than $4 billion in debt.
Reliance plans to retain Future’s employees at the stores it takes over, sources have said.
Amazon, which has a stake in a separate Future Group unit that it argues prevents Future from selling retail assets without its permission, has called the supermarkets and other stores an “irreplaceable” network in a sector worth $900 billion in revenues annually.
The legal wrangles had over time become increasingly high-stakes and marked by ugly rhetoric. At one point, Amazon sought for Future Chief Executive Kishore Biyani to be detained in prison for disobeying a legal order. And Future once likened Amazon to Alexander the Great and his “ruthless ambition to scorch the earth”.
But on Thursday, six days after Reliance’s move, Amazon at a Supreme Court hearing unexpectedly called for cordial talks to end the dispute – a proposal Future agreed to.
“People have taken over shops … let’s at least have a conversation,” Amazon’s lawyer Gopal Subramanium said.
Discussions are expected to begin soon.
Whatever the outcome of the talks, analysts say Amazon had gravely underestimated Reliance.
“If anybody should have seen this coming, it should have been Amazon and they should have prepared against it,” said Devangshu Dutta of retail consultancy Third Eyesight.
“Clearly, they didn’t.”
Ambani is richest indian noww.
2nd is adani…right na
who is third??
search online
who is third one
Nice Post… Mukesh Ambani is richest person in India
Shiv Nadar is 3rd richest
For those who though that Buying Russian Oil reduced the local oil rates in India.The cut in fuel rates was due to a CUT in Additional Excise Duty (AED)
The AED is NOT SHARED BY THE GOI WITH THE STATES ! The Indian states LIVE on the VAT on Oil !The Indian states are BUST – and have NO SCOPE to cut VAT ! HENCE,THE GOI HAS CUT AED TO REDUCE INFLATION !
THE IMPORTED RUSSIAN OIL IS ENTIRELY EXPORTED ! IT HAS NO IMPACT ON LOCAL FUEL RATES !
ONLY THE PRIVATE INDIAN REFINERS ARE IMPORTING RUSSIAN OIL – AS INDIAN OIL PSUs,HAVE THE FEAR OF SANCTIONS !
Granted that the Indian Oil PSUs have locked in Long term contracts for Oil Sourcing – but Chonese Oil PSUs like Sinopec & Zhenhua are buying Russian Disc Oil.Zhenhua is a trader ! Indian PSUs can declare Force Majeure – but they ain’t.OR THE INDIAN OIL PSUs – CAN BUY RUSSIAN OIL VIA A TRADER – SO THAT SANCTIONS FALL ON THE TRADER (as even EU and other nations.as of today are refining Russian Oil)
But NOT India ! In India,Private companies are TAKING FULL ADVANTAGE OF the GOI Foreign Policy – to REDUCE THEIR PROCUREMENT COSTS & DUMP DIESEL ABROAD – TO EARN SUPER PROFIT, SOLELY DUE TO THE ABILITY OF THE GOI TO NAVIGATE US SANCTIONS !
But the same Indian Private players are not even OFFSETTING THE EXPORT superprofits,with domestic sales. & THERE IS NO SUPERPROFIT TAX ON THESE REFINERS – AS THIS DISCOUNTED OIL & EXPORTED DIESEL PROFIT – IS DUE TO NO INTELLECTUAL ACUMEN,OR STRATEGIC TIMING.
THE GOI BANNED STEEL EXPORTS VIA EXPORT TAX – BUT NO EXPORT TAX ON FUEL EXPORTS !
Y ?
If India buys 300 million barrels of Russian Discounted Oil via the private players and they refine and export as diesel – that is 9 Billion USD
So Y is the GOI NOT doing this,VIA the Oil PSUs ?
MAD = MODI AMBANI DEAL !
This 9 Billion USD is the sinking fund, for the Lok Sabha Polls
And the US is NOT sanctioning the Indian Pvt Oil companies – as MODI is protecting them !
And the people of India are suffering, the High Oil Prices and the Banias are lining their pockets – JUST LIKE DEMO/GST………
Indians must be MAD to accept this farce of a democracy, and distorted capitalism !
BUT IS IT RUSSIAN LOVE FOR RAJ KAPOOR AND INDIA – THAT THEY ARE SELLING OIL, AT STEEP DISC ?
NEIN !
NAYARA = RUSSIA ! NAYARA IS OWNED BY RUSSIA – WHO ARE THE OWNERS OF THE VC WHICH HAS INVESTED IN NAYARA ? THE REAL OWNERS !
IS RELIANCE USING NAYARA AS THE PRETEXT TO ALSO PILE INTO THE RUSSIAN OIL SUPERPROFIT – AND Y IS THE US/EU NOT SANCTIONING NAYARA ? COZ – THEN US WILL HAVE TO SANCTION MODI -ID.EST., RELIANCE ! dindooohindoo
THIS IS MAKE IN INDIA – CHAIWALA STYLE !