Skip to content
Andy Mukherjee

Amazon Versus Ambani Makes for a Cranky Board

The stakes are high between Jeff Bezos and Asia’s richest man in their fight over a near-bankrupt company that was a pioneer in India’s $800 billion retail market.

Amazon Inc. is locked in a struggle over India’s retail market.

Amazon Inc. is locked in a struggle over India’s retail market.

Photographer: Dhiraj Singh/Bloomberg

Two of the world’s richest men, fighting over a near-bankrupt Indian retailer, have made so much noise that its board has woken up super cranky. In less than a week, the three independent directors of Future Retail Ltd. have shot off two letters to the country’s competition authority, alleging that had deliberately misled the regulator about the true nature of its 2019 investment in a related entity. They want the antitrust watchdog to cancel the transaction.

The 2025 dollar bonds of Future Retail rose a little Monday, though they still trade at 61 cents to the dollar. Based on what an arbitration tribunal in Singapore has had to say on the issue of alleged misrepresentation by Amazon, the maneuver looks like a long shot. But one never can predict the course of regulatory action in India. If the gambit succeeds, Asia’s wealthiest businessman, Mukesh Ambani, may be able to get his hands on Future’s retail stores after all, a deal Amazon boss Jeff Bezos has so far managed to block using judicial proceedings. A scrapping of Amazon’s investment would leave the U.S. retailer with no valid contract to stop the sale of assets to Ambani.

It’s rare for Indian boards to question the legality of agreements that they’ve been involved in. But then, the stakes are high in the Ambani vs. Bezos battle. The outcome could go some way toward determining which of the two billionaires would ultimately control India’s $800 billion retail market. This isn’t a war the directors can sit out — not with Future sinking under the weight of 190 billion rupees ($2.5 billion) of liabilities, and relentless losses that jumped 80% from a year earlier in the six months through September.   

The unraveling of Future, a pioneer of modern mass retailing in India with 1,500-plus stores spread across 16 million square feet, began some time ago. The $192 million Amazon paid for a 49% interest in founder Kishore Biyani’s Future Coupons Pvt. translated to indirectly owning roughly 10% of the publicly traded Future Retail, at a premium to the prevailing share price. Amazon, which gave the money expressly for Coupons to invest in the debt-laden Retail, insisted on a list of restricted parties to whom the physical stores couldn’t be sold without the e-commerce giant’s go-ahead. Ambani’s name was on the list, and that’s why Bezos initiated arbitration proceedings for breach of contract when Future brought in India’s No. 1 retail tycoon for a fresh $3.4 billion rescue after it was hit hard by last year's pandemic.