Media & Entertainment

Indian court agrees to send Future Retail into bankruptcy in another setback for Amazon

Comment

Future Retail, Amazon's estranged partner in India, scales down operations as Reliance takes over
Image Credits: Amal KS / Hindustan Times / Getty Images

An Indian court on Wednesday ordered the initiation of insolvency process against Amazon’s estranged partner Future Retail in yet another setback for the American e-commerce group in the key overseas market.

The National Company Law Tribunal’s verdict (PDF) on the petition filed by Bank of India will allow the creditors to find a new owner for Future Retail, which once ran India’s second largest retail chain and attempted to sell most of its business to Reliance Industries for $3.4 billion. Amazon India, long stuck in the legal battle with Reliance and Future, had filed an intervention request to halt the insolvency proceedings.

Amazon India had alleged that the petition filed by the nationalized bank was of “fraudulent and malicious intention.” It also accused Future Retail’s 26 creditors, including Bank of India, of colluding with the retail giant to deny its rights.

“After hearing both the parties and on perusal of material on record, we are of the view that the FA (Facility Agent, which is Bank of India) has been signed within the ambit of the RBI Circular by all the 26 Lenders and the question of FA being in violation of any injunctions does not arise as no sale of any assets has happened and seeking consent of Amazon under Clause 5.1.2 was not breached,” the court said in its order.

The Wednesday ruling is yet another setback for Amazon, which acquired 49% stake in Future Retail’s unit Future Coupons with an investment of over $187 million. Amazon has argued that Future Group violated its contract by doing a deal with Reliance and earlier approached the Singapore arbitrator to halt the deal between the Indian firms. The ensuing legal battle delayed the completion of the deal, during which Future Group’s debt piled up and earned a once-iconic Indian company a “non-performing asset” evaluation from lenders.

In April this year, Reliance Industries said it “cannot implement” its $3.4 billion deal to acquire core parts of retail chain Future Group after the latter’s secured creditors rejected the offer.

Reliance, which operates the nation’s largest retail chain, is the only winner in the years-long battle, analysts say. As Amazon and Future fought in courts, Reliance began taking over several Future stores starting in February after brokering deals with landowners in a move that stunningly blindsided and outwitted the U.S. firm. Cash-strapped Future said in a filing that it could not pay rent at many outlets and was scaling down its operations.

Amazon, which has spent more than $6.5 billion in its India operations, is not amused. Earlier this year, it took out newspaper ads to accuse that Reliance and Future had indulged in fraudulent practices by “removing the substratum of the dispute.”

Brick and mortar shops continue to drive most of retail in India, one of the last great growth markets for American giants. As Amazon and its e-commerce Indian rival, Walmart’s Flipkart, scramble to ink deals with physical retail in the South Asian market, Mukesh Ambani’s Reliance Industries is increasingly expanding its own online e-commerce ambitions.

More TechCrunch

The spam reached Bluesky by first crossing over two other decentralized networks: Mastodon and Nostr.

The ‘vote Trump’ spam that hit Bluesky in May came from decentralized rival Nostr

Welcome to TechCrunch Fintech! This week, we’re looking at the continued fallout from Synapse’s bankruptcy, how Layer wants to disrupt SMB accounting, and much more! To get a roundup of…

There’s a real appetite for a fintech alternative to QuickBooks

The company is hoping to produce electricity at $13 per megawatt hour, which would be more than 50% cheaper than traditional onshore wind.

Bill Gates-backed wind startup AirLoom is raising $12M, filings reveal

Generative AI makes stuff up. It can be biased. Sometimes it spits out toxic text. So can it be “safe”? Rick Caccia, the CEO of WitnessAI, believes it can. “Securing…

WitnessAI is building guardrails for generative AI models

It’s not often that you hear about a seed round above $10 million. H, a startup based in Paris and previously known as Holistic AI, has announced a $220 million…

French AI startup H raises $220M seed round

Hey there, Series A to B startups with $35 million or less in funding — we’ve got an exciting opportunity that’s tailor-made for your growth journey! If you’re looking to…

Boost your startup’s growth with a ScaleUp package at TC Disrupt 2024

TikTok is pulling out all the stops to prevent its impending ban in the United States. Aside from initiating legal action against the U.S. government, that means shaping up its…

As a US ban looms, TikTok announces a $1M program for socially driven creators

Microsoft wants to put its Copilot everywhere. It’s only a matter of time before Microsoft renames its annual Build developer conference to Microsoft Copilot. Hopefully, some of those upcoming events…

Microsoft’s Power Automate no-code platform adds AI flows

Build is Microsoft’s largest developer conference and of course, it’s all about AI this year. So it’s no surprise that GitHub’s Copilot, GitHub’s “AI pair programming tool,” is taking center…

GitHub Copilot gets extensions

Microsoft wants to make its brand of generative AI more useful for teams — specifically teams across corporations and large enterprise organizations. This morning at its annual Build dev conference,…

Microsoft intros a Copilot for teams

Microsoft’s big focus at this year’s Build conference is generative AI. And to that end, the tech giant announced a series of updates to its platforms for building generative AI-powered…

Microsoft upgrades its AI app-building platforms

The U.K.’s data protection watchdog has closed an almost year-long investigation of Snap’s AI chatbot, My AI — saying it’s satisfied the social media firm has addressed concerns about risks…

UK data protection watchdog ends privacy probe of Snap’s GenAI chatbot, but warns industry

U.S. cell carrier Patriot Mobile experienced a data breach that included subscribers’ personal information, including full names, email addresses, home ZIP codes and account PINs, TechCrunch has learned. Patriot Mobile,…

Conservative cell carrier Patriot Mobile hit by data breach

It’s been three years since Spotify acquired live audio startup Betty Labs, and yet the music streaming service isn’t leveraging the technology to its fullest potential — at least not…

Spotify’s ‘Listening Party’ feature falls short of expectations

Alchemist Accelerator has a new pile of AI-forward companies demoing their wares today, if you care to watch, and the program itself is making some international moves into Tokyo and…

Alchemist’s latest batch puts AI to work as accelerator expands to Tokyo, Doha

“Late Pledge” allows campaign creators to continue collecting money even after the campaign has closed.

Kickstarter now lets you pledge after a campaign closes

Stack AI’s co-founders, Antoni Rosinol and Bernardo Aceituno, were PhD students at MIT wrapping up their degrees in 2022 just as large language models were becoming more mainstream. ChatGPT would…

Stack AI wants to make it easier to build AI-fueled workflows

Pinecone, the vector database startup founded by Edo Liberty, the former head of Amazon’s AI Labs, has long been at the forefront of helping businesses augment large language models (LLMs)…

Pinecone launches its serverless vector database out of preview

Young geothermal energy wells can be like budding prodigies, each brimming with potential to outshine their peers. But like people, most decline with age. In California, for example, the amount…

Special mud helps XGS Energy get more power out of geothermal wells

Featured Article

Sonos finally made some headphones

The market play is clear from the outset: The $449 headphones are firmly targeted at an audience that would otherwise be purchasing the Bose QC Ultra or Apple AirPods Max.

5 hours ago
Sonos finally made some headphones

Adobe says the feature is up to the task, regardless of how complex of a background the object is set against.

Adobe brings Firefly AI-powered Generative Remove to Lightroom

All cars suffer when the mercury drops, but electric vehicles suffer more than most as heaters draw more power and batteries charge more slowly as the liquid electrolyte inside thickens.…

Porsche Ventures invests in battery startup South 8 to boost cold-weather EV performance

Scale AI has raised a $1 billion Series F round from a slew of big-name institutional and corporate investors including Amazon and Meta.

Data-labeling startup Scale AI raises $1B as valuation doubles to $13.8B

The new coalition, Tech Against Scams, will work together to find ways to fight back against the tools used by scammers and to better educate the public against financial scams.

Meta, Match, Coinbase and others team up to fight online fraud and crypto scams

It’s a wrap: European Union lawmakers have given the final approval to set up the bloc’s flagship, risk-based regulations for artificial intelligence.

EU Council gives final nod to set up risk-based regulations for AI

London-based fintech Vitesse has closed a $93 million Series C round of funding led by investment giant KKR.

Vitesse, a payments and treasury management platform for insurers, raises $93M to fuel US expansion

Zen Educate, an online marketplace that connects schools with teachers, has raised $37 million in a Series B round of funding. The raise comes amid a growing teacher shortage crisis…

Zen Educate raises $37M and acquires Aquinas Education as it tries to address the teacher shortage

“When I heard the released demo, I was shocked, angered and in disbelief that Mr. Altman would pursue a voice that sounded so eerily similar to mine.”

Scarlett Johansson says that OpenAI approached her to use her voice

A new self-driving truck — manufactured by Volvo and loaded with autonomous vehicle tech developed by Aurora Innovation — could be on public highways as early as this summer.  The…

Aurora and Volvo unveil self-driving truck designed for a driverless future

The European venture capital firm raised its fourth fund as fund as climate tech “comes of age.”

ETF Partners raises €285M for climate startups that will be effective quickly — not 20 years down the road