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 26,2024

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Mangaluru: The coastal districts of Dakshina Kannada and Udupi are witnessing a fascinating weather pattern, with chilly early mornings giving way to dry, sweltering afternoons. Over the past two days, dense fog blanketed the rural landscapes, while urban centers like Mangaluru felt the stark contrast of brisk mornings and peak afternoon heat.

The India Meteorological Department (IMD) noted that in rural areas, the morning chill caused temperatures to dip by one to two degrees Celsius below the seasonal norm, intensifying the fog. Monday saw Mangaluru recording a maximum temperature of 33.3°C and a minimum of 22.6°C, reflective of the sharp day-night variation.

While mornings painted a serene picture with mist-covered trees and a cool ambiance, the afternoons proved relentless, with temperatures soaring between 11 am and 3 pm, offering little respite. Currently, there are no signs of rainfall, with forecasts predicting the continuation of this dual weather pattern for the coming days.

Local residents have mixed feelings about this weather trend. Farmers in rural areas appreciate the cool mornings that ease early chores but express concerns over the dry afternoons, which may affect crop irrigation if the dry spell prolongs. In contrast, urban dwellers are enjoying the foggy mornings but brace for the scorching afternoons.

Meteorologists attribute the sudden chill to shifts in atmospheric pressure along the coast, a precursor to possible weather transitions in December. Whether this pattern persists or leads to unexpected changes remains to be seen, but the twin districts are clearly caught in nature's dramatic play of contrasts.

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News Network
November 15,2024

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Iran’s Islamic Revolution Guards Corps (IRGC) has killed or captured 69 terrorists linked to the Israeli spy agency Mossad during a major counterterrorism drill in the country's southeast, its spokesman says.  

General Ahmad Shafaei, the spokesman for the “Martyrs of Security” drill, said Friday that a total of 23 terrorists have been killed and another 46 arrested in various clean-up operations ever since the IRGC Ground Force launched it in the Sistan and Baluchestan province on November 1.

Seven terrorists have also turned themselves in during the period.

“The undeniable fact about terrorists is that they rely on arrogant powers, particularly the intelligence service of the wicked and vicious Zionist regime," Shafaei said.

“Unfortunately, weapons and munitions at terrorists’ disposal are among the most sophisticated ones in the world. This accounts for their heavy dependence.” 

The official stated that several members of the disbanded terror teams were non-Iranian nationals, who had been hired by foreign intelligence agencies to carry out acts of sabotage and terror inside Iran.

In a most recent operation, six terrorists were arrested and four others were eliminated, three of whom were non-Iranians, he added. 

On October 26, ten members of Iran's law enforcement forces were killed in a terrorist attack in the Gohar Kuh district of Taftan in the Sistan and Baluchestan province.

The so-called Jaish al-Adl terrorist group claimed responsibility for the assault, which was one of the deadliest in the province in recent months.

The group has carried out numerous terrorist attacks in Iran, primarily in Sistan and Baluchestan.

Its tactics include the abduction of border guards as well as targeting civilians and police stations within the province to incite chaos and disorder.

In January, Iran launched a military operation during which the headquarters of the Pakistan-based terrorist group was targeted in missile strikes, destroying its infrastructure.

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News Network
November 26,2024

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Bengaluru: The Janata Dal (Secular) is grappling with its most tumultuous political crisis yet, with speculation rife about imminent defections among its lawmakers. This storm comes in the aftermath of party scion Nikhil Kumaraswamy's humiliating defeat in the Channapatna bypoll—his third consecutive electoral loss after setbacks in Mandya (2019) and Ramanagara (2023). With the regional party’s Assembly tally shrinking to 18 from 19, questions are being raised about its survival.

The murmurs of rebellion were amplified on Monday when Health Minister Dinesh Gundu Rao and Congress MLA CP Yogeshwar openly hinted at possible desertions within the JD(S) ranks. Yogeshwar, newly elected from Channapatna, declared he could orchestrate a migration of JD(S) MLAs to Congress. “I’ll meet them at the Belagavi session. Within a month, they’ll be in Congress,” he confidently stated during a televised interview. Yogeshwar has a history of engineering defections, having played a pivotal role in the collapse of the JD(S)-Congress coalition government in 2019 during his stint with the BJP.

Dinesh Gundu Rao, not mincing words, slammed the JD(S) leadership for fostering "self-serving politics," criticizing the HD Deve Gowda family for failing to nurture party talent. “There’s no trust. Their MLAs will seek survival—either in BJP or Congress,” he remarked.

Meanwhile, the expelled JD(S) state president CM Ibrahim added fuel to the fire by claiming that 12-13 MLAs are "disillusioned" with the current leadership. Speculations around senior JD(S) leader GT Deve Gowda joining Congress have also intensified. DK Shivakumar, Karnataka’s Deputy CM and Congress president, described GT Deve Gowda as a “valuable leader” who might be frustrated with the party’s internal dynamics.

While Congress leaders seem eager to poach JD(S) legislators, the BJP is not far behind in targeting the floundering party. The situation signals a decisive moment for the JD(S), as its survival now hinges on how it manages this brewing storm of discontent.

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