Mukesh Ambani vs Jeff Bezos: A fight or a waiting game?

News Network
November 3, 2020

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A vanilla commercial dispute is setting the stage for a clash between the world’s No. 1 and No. 6 richest men. But the legal wrangling is a sideshow. What Jeff Bezos and Mukesh Ambani are really fighting over is pole position in the only billion-plus-people consumer market available to both of them: India.

The ostensible battleground is a $3.4 billion deal Indian tycoon Ambani’s Reliance Industries Ltd. stitched up in August to acquire assets of debt-laden local retailer Future Group. Bezos’s Amazon.com Inc. is trying to block the transaction.

That, in itself, is a bit of a dampener. Expectations were building for the two billionaires to work together. In September, Bloomberg News reported that Ambani had given Amazon an option to buy as much as 40% of Reliance Retail Ventures Ltd., seeking to repeat the success he had earlier this year in bringing in Facebook Inc. and Alphabet Inc. as partners to his digital platform.

By seeking to stall Ambani’s purchase of Future, Bezos may be signaling that he would rather remain a rival. Or, that he’s buying time to sweeten the offer currently on the table.

The actual quarrel is only interesting when you read between the lines of the claims and counterclaims.

Amazon bought a 49% stake last year in a private firm controlled by Kishore Biyani, a pioneer of modern-format retailing in the country. The investment gave the U.S. e-commerce giant the right to acquire Biyani’s shares in the publicly traded Future Retail Ltd. from the third year. Another of Bezos’s conditions was that Biyani wouldn’t sell his assets — about 1,500 stores nationwide — to restricted persons, including Reliance, which operates India’s largest retail chain.

After the Future-Reliance deal was announced, Amazon alleged breach of contract and obtained an interim stay against the sale from an arbitrator in Singapore, a preferred neutral venue in Asia for settling disputes in cross-border agreements. The U.S. company then wrote a letter to Indian stock exchanges and the regulator, asking them to not approve the transaction.

Future Retail has challenged Amazon’s position by saying that the Singapore ruling has no legal basis in India, and that anyway, it wasn’t a party to the founder’s agreement. Given the debilitating impact of the Covid-19 pandemic on operations, the retailer says it’s doing the right thing by all stakeholders in selling assets to Reliance. As for Amazon’s claim of $193 million in damages plus interest, that liability, if awarded by the arbitrator, should fall on Biyani’s private firm that did the deal, Future Retail argues.

Biyani is just a pawn in a much bigger power play. Future's cash crunch didn't emerge suddenly. Amazon had ample opportunity to tiptoe around India’s legal restrictions on foreign ownership of retail chains to act as a white knight. But it didn’t.

Amazon may still be interested in partnering with Ambani — at the right price. Other investors, such as Silver Lake Partners and KKR & Co., have written him checks worth $5 billion in total. They may have feared losing out on what could become India’s most successful mix of physical and digital shopping, a strategy that leverages Reliance Retail’s own outlets together with independently owned neighbourhood stores connected to Ambani’s 4G phone network of 400 million users. However, the portion offered to Amazon would mean a $20 billion commitment. Bezos could afford to see how well Ambani executes his plan.

Amazon’s India website kicked off its annual festival season last month to record sales in the first couple of days. Reliance Retail’s revenue also jumped 30% in the September quarter from the previous three months. But although India’s nationwide lockdown has ended, not all stores have reopened fully. Footfall has yet to recover, especially in fashion and lifestyle and at stores inside malls. In Macquarie’s estimates, the next fiscal year’s earnings per share for Reliance Industries, the holding company, may be 23% below the consensus street forecast. A reason, the brokerage says, is stiff competition, high investment and low margins in retail. Reliance Industries shares fell 8.6% in Mumbai on Monday.

Amazon’s letter to the Securities and Exchange Board of India makes a reference to India’s “ease of doing business,” which has been a sore point with foreign investors from Vodafone Group Plc to Cairn Energy Plc. The regulator needs to hold listed firms accountable for their dealings, Amazon said in the letter, according to Reuters, which has seen a copy.

The last thing India wants is more of a bad rap. The Seattle-based firm already has to operate with one hand tied behind its back: As a foreign e-commerce player, it can’t own inventory or openly discount merchandise. Even harsher rules — covering data and algorithms — may be on their way. It’s important for regulators to not give Amazon the chance to paint a commercial feud as another sign of India’s unfair treatment of global investors.

In more ways than one, a waiting game by Bezos may not be a bad idea.

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News Network
November 27,2024

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Chandrashekaranatha Swami (left) with chief minister

Bengaluru: Amidst the ongoing Waqf controversy in the state, a Vokkaliga seer has sparked controversy by suggesting the disenfranchisement of Muslims, claiming it would end vote bank politics in India.

The provocative remarks were made by Kumara Chandrashekaranatha Swami during a protest organized by the Bharatiya Kisan Sangh, a farmers’ organization with links to the RSS. The protest focused on farmers' lands being marked as Waqf properties.

"Politicians are exploiting this issue for votes. Muslims should be deprived of voting rights. This step is necessary to eliminate vote bank politics and allow India to prosper," the seer stated. He is the head of the Vishwa Vokkaliga Mahasamsthana Mutt, which was founded with support from JD(S) leader and former Prime Minister HD Deve Gowda.

The seer also made misleading claims about Pakistan, stating, “In Pakistan, minorities don’t have the right to vote. If we implement the same in India, Muslims would be isolated, and peace would prevail.” However, minorities in Pakistan have voting rights. 

Chandrashekaranatha Swami continued his criticism of the Waqf Board, accusing it of unlawfully seizing properties. “It is unjust to take someone’s property. We must ensure that the Waqf Board is abolished,” he said. He further emphasized the need for farmers' land to remain protected, even at the cost of political fallout.

Minister Condemns Remarks

Minister for Social Welfare, H.C. Mahadevappa, swiftly condemned the seer’s comments, stating, “After years of struggle, Baba Saheb Dr. B.R. Ambedkar established the principle of ‘one vote, one value.’ It is crucial for Dalits, backward communities, and minorities to understand its significance.”

He continued, "Those who spread hatred for political gain under the guise of religion must end their harmful rhetoric."

Earlier, Kumara Chandrashekaranatha Swami had stirred controversy by suggesting that Chief Minister Siddaramaiah step down to allow Deputy Chief Minister D.K. Shivakumar to assume the role of Chief Minister for the remainder of the term. The statement created a fresh political debate, raising questions about the power dynamics in Karnataka's ruling party.

The seer remarked, “Everyone has had the opportunity to hold the Chief Minister’s position, except D.K. Shivakumar. I request our experienced Chief Minister Siddaramaiah to vacate the post and bless Shivakumar with the opportunity.”

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News Network
November 13,2024

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Bengaluru: An estimated overall 10.14 per cent voter turnout was recorded during the first two hours, since the voting began for bypolls to three Assembly segments in Karnataka on Wednesday, election officials said.

The voting began at 7 am and will go on till 6 pm.

More than seven lakh voters are eligible to cast their votes in about 770 polling stations in Shiggaon, Sandur and Channapatna, where a total of 45 candidates are in the fray.

While Channapatna recorded 10.34 per cent voter turnout till 9 am, it was 10.08 per cent in Shiggaon, and 9.99 per cent in Sandur, election officials said.

Voters, including women and elderly were seen queuing up in front of polling booths in these segments.

By-polls for Sandur, Shiggaon, and Channapatna are necessitated, as the seats fell vacant following the election of their respective representatives -- E Tukaram of Congress, former CM Basavaraj Bommai of BJP, and Union Minister H D Kumaraswamy of JD(S) -- to Lok Sabha in May elections.

As many as 31 candidates are in the fray from Channapatna, while Sandur and Shiggaon have six and eight contenders, respectively.

Elaborate security arrangements have been made in the three segments for the smooth conduct of the polls.

The by-polls will witness a straight fight between the ruling Congress and BJP in Sandur and Shiggaon segments, while in Channapatna, JD(S) which is part of the NDA alliance is in contest against the grand old party.

Among the three segments, Channapatna is considered to be a "high profile", where the contest is between C P Yogeeshwara, a five time MLA from the segment and former Minister, who joined the Congress quitting BJP ahead of nomination, and actor-turned -politician Nikhil Kumaraswamy, who is Kumaraswamy’s son and former PM H D Deve Gowda's grandson.

BJP's Bharath Bommai, son of Basavaraj Bommai, is fighting Congress Yasir Ahmed Khan Pathan, who had faced defeat against the former Chief Minister in the 2023 Assembly polls, in Shiggaon.

Bharath Bommai and his father cast their vote at a polling booth in Shiggaon segment.

In Sandur, Bellary MP Tukaram's wife E Annapurna of Congress is contesting from the seat vacated by her husband, against, BJP ST Morcha president Bangaru Hanumanthu, who is considered close to party leader and former mining barron G Janardhan Reddy.

Annapurna, Tukaram and other family members cast their votes at a booth in the segment.

With Nikhil Kumaraswamy and Bharath Bommai contesting, the third generation of Gowda and Bommai families are in the fray in this by-poll. Both their fathers and grandfathers have served as Karnataka's Chief Ministers in the past.

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News Network
November 17,2024

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An Israeli airstrike on the office of Syria’s Baath party in Lebanon’s capital Beirut has killed the Lebanese resistance movement Hezbollah's Media Relations Officer, Mohammad Afif, reports say.

Lebanon's National News Agency (NNA) reported that the Israeli raid struck the Ba'ath party’s building in central Beirut district of Ras Al-Naba'a on Sunday, adding that the strike was an attempt to assassinate the leader of the resistance media front.

According to Baath Secretary-General Ali Hijazi, Afif was having a meeting in the Baath Party headquarters when Israel carried out the attack.

"Afif did not fight with weapons and did not lead a military unit in Hezbollah. Rather, he led a media unit," he said.

Reuters, Sky News, Al Jazeera and a number of Henrew-language media reported that Afif was killed in the Israeli strike.

However, Hezbollah has not yet confirmed Afif’s death or whether he was present at the site or not.

Earlier, the Lebanese Health Ministry said at least one person was killed and three others injured after an Israeli strike targeted a central district in Beirut.

Lebanon's al-Mayadeen television network reported that five people were killed in the attack.

The latest development came after Afif said Hezbollah was behind the Caesarea operation and targeting Netanyahu’s home during a speech at the Ghobeiry area in the southern suburbs of Beirut on October 22.

This was the second assassination attempt on Afif in the last two months, after he survived an attack on the Hezbollah media relations office several weeks ago.

Israel launched a ground assault and massive air campaign against Lebanon in late September after a year of exchanging fire across the Lebanese border in parallel with the Gaza war.

At least 3,287 people have been killed in Israeli strikes in Lebanon over the past year, with the vast majority in the past seven weeks. Another 14,222 have been wounded, mostly women and children.

In response to the ongoing aggression, the Lebanese resistance movement Hezbollah has been staging hundreds of retaliatory strikes against the occupied Palestinian territories and the Israeli forces trying to advance on southern Lebanese areas.

The movement has vowed to sustain its strikes until the regime ends the escalation.

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