The independent directors of Future Retail Ltd (FRL) in another letter to the Competition Commission of India (CCI) on Sunday have accused Amazon of submitting to the commission with “completely opposite” information and said they were “contradictory” to Amazon’s own internal communications regarding the US giant’s 2019 investments into FRL’s promoter company.

In their latest letter to the CCI chairman Ashok Kumar Gupta the directors quoted Amazon’s internal communications and said the US giant was initially planning to pump money directly into FRL through a proposed foreign portfolio investment. However, in late 2018 India through a policy document called Press Note 2 amended its foreign direct investment regulations for e-commerce marketplaces that restricted those companies from selling products on marketplaces having equity participation from the same platform operators. That prompted Amazon to invest in the promoter firm Future Coupons Pvt Ltd (FCPL) rather than directly infusing capital into FRL, the letter said.

“Thereafter, due to Amazon’s concerns arising out of Press Note 2 (PN2), the investment structure was changed to Amazon investing in a twin-entity investment structure i.e. Amazon would invest in FCPL and FCPL will acquire 9.82% of FRL,” the Sunday letter said.

The directors said that while in its CCI application Amazon had mentioned that it was investing in FCPL due to its “unique business model.”

However, the directors accused Amazon had paid a 25% premium or Rs 280 crore ($41 million at current exchange rate) over the regulatory price of FRL’s share at that time. Amazon’s total investment in FCPL was Rs 1,431 crore.

“The number of equity shares of Future Retail to be held by Future Coupons has been calculated such that Amazon can indirectly hold the same number of shares of Future Retail that Amazon would have acquired if Amazon had directly invested INR14B (billion) in Future Retail at a price per share representing a 25% premium on the minimum regulatory price prescribed for issuance of fresh shares of a listed entity under Indian law,” the letter quoted a July 2019 email sent to Amazon CEO Jeff Bezos by Amazon’s India legal head Rakesh Bakshi. “This premium is being paid on account of the strategic rights. Due to the call option and the strategic rights being at or above the prevailing market price, we currently estimate a ~$41MM P&L loss at sign.”

The directors wrote that “inspite of the fact that in their mind, the rights acquired by Amazon over FRL were strategic, Amazon has chosen to represent these rights as ‘investment protection rights’ to CCI.”

The letter further said that while changing the investment proposal to twin-entity structure, lawfirm AZB representing Amazon proposed in an email “to ensure that these rights are enforceable against FRL albeit through the company (FCPL), it is preferred that these rights are captured by way of a specific agreement between the Company (FCPL), the promoters and FRL. The manner in which the company exercises these rights will be a veto matter under the (FCPL) SHA (shareholders agreement).”

“It is clear that Amazon has insisted that FRL SHA be executed as a condition precedent for Amazon’s investment in FCPL,” the FRL directors told the CCI in the Sunday letter. An Amazon spokesperson did not immediately respond to requests for comment on the Sunday letter.

The latest letter comes on the heels of the independent directors’ first letter last week to agency where they had accused Amazon of violating India’s foreign direct investments (FDI) and foreign exchange rules and alleged the US e-commerce giant had “concealed facts” and making “misrepresentation” and “false representations” while seeking the competition authority’s approval for its investment in FCPL.

Amazon and Future Group have been embroiled in about a dozen legal cases after the India group announced in August 2020 that it has agreed to sell its assets to Reliance Retail on a slump sale basis for Rs 25,000 crore. Amazon has been objecting to the sell-off plans and accused Future Group of breaching the 2019 investment agreement.

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