frl: Amazon urges RBI to conduct audit of FRL


NEW DELHI: US e-tailer Amazon has urged RBI to conduct a forensic audit of Future Retail (FRL) for the past three financial years, alleging that the promoters and directors of Big Bazaar parent have committed fraud by letting Reliance take over around 800 stores of the debt-laden company.
The 14-page letter that TOI has reviewed comes in the wake of the Rs 25,000 crore Reliance-Future deal falling through on account of a majority of FRL’s secured creditors voting against the proposed transaction.
Kishore Biyani-led FRL, which owes its creditors around Rs 18,500 crore, is currently staring at bankruptcy, with its largest creditor Bank of India (BOI) having filed an insolvency petition against the retailer
It is incumbent upon RBI to conduct a thorough investigation into the fraud committed by FRL, its promoters, directors and KMPs,” Amazon wrote in the letter. “Accordingly, it is requested that a forensic audit be conducted for FRL for the past three financial years as RBI is empowered to inter alia under the RBI Fraud Circular, financial documents and Framework Agreement.”
FRL and RIL did not comment till the time of this story going to print. Amazon, which has been fighting a bitter legal battle with FRL to block the Reliance-Future deal, alleged that a collusion between FRL’s lenders, Reli
ance and FRL’s promoters was designed to overcome injunctions against such a deal and erode the value of FRL. While alleging that FRL has willingly handed over the stores to RIL, Amazon claimed the lender banks failed to “take cognizance, let alone prevent FRL and the MDA Group (Mukesh Dhirubhai Ambani Group) from committing fraud”.
“The conduct and attitude of lender banks raises substantial questions on accountability, transparency and fairness regime in the banking system. Instead of taking stringent action, the lender banks have instead given the Biyanis a reprieve by purportedly taking FRL into insolvency…,” wrote Amazon.
Amazon’s legal battles started after the proposed Future-Reliance deal was announced nearly two years ago, when the e-tailer dragged FRL to a Singapore-based emergency arbitrator.





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