India’s capital markets regulator SEBI has imposed a penalty of Rs 10 lakh on Future Retail Ltd for failing to timely disclose an interim arbitration order related to its high-profile legal battle with Amazon. The disclosure delay, linked to a case before the Singapore International Arbitration Centre (SIAC), raises serious questions about corporate governance during the now-collapsed Future-Reliance retail deal.
Delayed Disclosures and Regulatory Wrath: SEBI Pulls Up Future Retail
In a significant enforcement action, the Securities and Exchange Board of India (SEBI) has penalized Future Retail Limited (FRL) with a Rs 10 lakh fine over its delayed and insufficient disclosures concerning interim arbitration proceedings initiated by Amazon before the Singapore International Arbitration Centre (SIAC).
SEBI’s order, signed by Adjudicating Officer Amit Kapoor, highlights a critical lapse in regulatory compliance. Under India’s Listing Obligations and Disclosure Requirements (LODR) Regulations, companies are mandated to disclose material events within 24 hours. However, FRL only informed the stock exchanges on 1 November 2020 — nearly a month after Amazon initiated arbitration on 6 October 2020.
The disclosure was made only after intervention from stock exchanges, which SEBI notes as a breach of timely reporting duties. “It was only after the active intervention of stock exchanges that FRL made the disclosure regarding the SIAC interim order,” Kapoor noted in his findings. He further criticized the company for failing to initially share a detailed chronology of events, the order’s implications, and instructions issued by SIAC as required by the LODR norms.
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Amazon vs Future: The Battle Over a Billion-Dollar Retail Deal
The regulatory reprimand stems from a long-running legal tug-of-war involving Amazon, Future Group, and Reliance Industries Ltd (RIL). In 2019, Amazon had acquired a 49% stake in Future Coupons, which indirectly gave it a say in Future Retail’s strategic decisions.
However, in August 2020, Future Group signed a Rs 24,713 crore deal with Reliance Retail to sell its retail, wholesale, logistics, and warehousing businesses. Amazon objected, claiming its contract gave it the first right of refusal and initiated arbitration proceedings at SIAC.
The SIAC’s interim ruling had barred Future Group from proceeding with the deal, which was a critical point of contention. Future Retail’s delay in publicly acknowledging this development became a red flag for regulators. By April 2022, the highly anticipated Reliance-Future deal was called off due to mounting legal and regulatory complications.
Stock Frozen and Fortunes Lost: Future Retail’s Market Collapse
Even as the legal dust settled, Future Retail’s stock has remained virtually inactive. Trading in the company’s shares has been suspended on the Bombay Stock Exchange (BSE), where its last quoted price was a meagre Rs 2.41. The scrip carries the note “Suspended due to Procedural Reasons”, indicating ongoing compliance or listing issues.
The SEBI penalty marks yet another blow to the embattled retail chain, once touted as a pillar of India’s offline retail boom. The company, already facing insolvency proceedings, is now grappling with reputational and financial ruin.
With corporate governance under increasing scrutiny, SEBI’s action serves as a reminder that regulatory transparency is not optional—especially in cases involving billion-dollar deals, cross-border legal disputes, and millions of investor interests.