SEBI Penalizes Future Retail Limited for Disclosure Lapses

The Securities and Exchange Board of India (SEBI) has imposed a monetary penalty of Rs. 10 lakhs on Future Retail Limited (FRL) for violations of disclosure-related provisions under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and SEBI (Prohibition of Insider Trading) Regulations, 2015. The adjudication stems from concerns raised by Amazon regarding the Scheme of Arrangement between Future Group and the Mukesh Dhirubhai Ambani (MDA) Group, which became the subject of arbitration proceedings before the Singapore International Arbitration Centre (SIAC).

SEBI found that FRL failed to disclose the initiation of arbitration proceedings by Amazon on time, despite receiving the notice on October 5, 2020. According to the regulatory framework, such events are to be disclosed within 24 hours as they are considered material developments. FRL only disclosed the matter on November 1, 2020 and that too after being prompted by stock exchanges.

Further, SEBI noted that FRL did not adequately disclose the interim order passed by SIAC on October 25, 2020. The order, which effectively restrained FRL from proceeding with its scheme involving MDA Group, was only vaguely mentioned in a stock exchange clarification on October 26, 2020, and detailed information was provided much later. SEBI held that this was in violation of the principles of timely and transparent disclosure expected under Regulation 4 and 30 of the LODR Regulations. Additionally, FRL was found to have violated the SEBI (Prohibition of Insider Trading) Regulations by not making UPSI generally available to the public, especially since the information had started appearing in media reports.

While imposing the penalty, SEBI observed that FRL’s conduct resulted in a breach of mandatory disclosure requirements intended to protect investors and maintain market transparency. The regulator clarified that the objective was not merely punitive but to ensure compliance and deter similar lapses in the future. Although the noticee contended that it was not a direct party to the shareholders’ agreement between Amazon and Future Coupons Pvt Ltd, SEBI highlighted that the interconnectedness of the promoter group and related parties made the event material for disclosure purposes.

At the time of this order, Future Retail Limited is undergoing liquidation under the Insolvency and Bankruptcy Code, 2016, and a liquidator has been appointed to manage its affairs. The penalty imposed will be crystallized as part of SEBI’s claim in the ongoing liquidation process.

SEBI ADJUDICATION ORDER NO: Order/AK/JR/2025-26/31385 dated April 24, 2025