The Enforcement Directorate has summoned Amazon India CEO Amit Agarwal next week in connection with alleged irregularities in a deal with Future Group, according to sources. In 2019, Amazon paid Rs 1,400 crore for a 49 % stake in Future Retail. 

The investigation is being done in the case to determine whether the transaction violated India’s foreign exchange law, or the Foreign Exchange Management Act (FEMA), which lays out the formalities and procedures for all such transactions in the country. 

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In January of this year, FEMA filed a complaint against Amazon India. 

The summons was issued by the Enforcement Directorate after the Delhi High Court made some observations regarding Amazon’s legal battle with Mukesh Ambani‘s Reliance Industries Ltd. 

When you add the three agreements together – the Future Retail shareholders agreement with Future Coupons, the Future Coupons shareholders agreement with Amazon, and the Future Coupons share subscription agreement with Amazon – you get the following:

Simply put, the high court found that Amazon took over control of Future Retail without the government’s permission through these three agreements, which would be in violation of the FEMA and FDI rules. 

Mukesh Ambani’s firm intends to acquire Future Retail, a move that Amazon has been attempting to thwart. Amazon and Ambani have been fighting in Indian and international courts. 

When Future Retail announced plans to sell its retail assets to rival Reliance Industries last year, Amazon used the deal with Future Retail to argue breach of contract. 

Future Retail’s plan to sell its stores to Reliance Industries, according to Amazon, violates the 2019 partnership contract, while the indebted company claims it will fail if the deal falls through.

Amazon.com Inc. had earlier, in October this year, filed an interim application in the Supreme Court, requesting that the meeting of Future Retail Ltd (FRL) shareholders and creditors to approve the deal with Reliance Industries Ltd’s (RIL’s) retail unit, which was approved by a company court, be halted.