Two industry associations representing apparel companies and distributors of fast-moving consumer goods (FMCG) companies have written to the Securities and Exchange Board of India (Sebi), urging the market regulator to review and approve Future Group's deal with Reliance Retail Ventures quickly.
In their letter, the Clothing Manufacturers Association of India (CMAI) and All India Consumer Products Distributors Federation (AICPDF) said the transaction approval has taken longer than expected and strained their finances completely. Together, they represent more than 5,000 small vendors and dealers. Even after the approval comes, it will take another 3-4 months to complete the transaction and for the industry to get their dues back. This delay will force many distributors and employees to take grave personal and financial steps.
Last year, the Future Group with a debt of nearly Rs 12,000 crore approached several investors after lenders exerted pressure and threatened to revoke promoter pledged shares. Reliance Retail Ventures, a unit of Reliance Industries, agreed to buy the retail assets of Future Group. As part of the deal, Reliance had also agreed to take vendor liabilities of Rs 6,300 crore.
Amazon, which owns a 49 per cent in Future Coupons, a Future Group holding company, objected to the deal and approached the arbitration court in Singapore. The US retailer asked Sebi to suspend its review of the deal and not grant it a no-objection certificate, since the transaction is under dispute in the Delhi High Court.
