- SEP 03 2020, 11:45 IST
- UPDATED: SEP 03 2020, 12:22 IST
Under a non-compete clause of the Reliance-Future Group deal, Kishore Biyani and his kin are banned from re-entering the retail space for the next 15 years, reports Economic Times quoting two sources in the know about the agreement’s specifics.
Sources told the publication that as per the deal, neither Biyani nor his immediate family members can operate in any retail segment. DH could not independently verify this report.
“There is, however, an exception, of home retailing, where Reliance has no presence so far. The deal is applicable for all existing retail businesses both online and offline,” one of the sources told the publication.
Last week, billionaire Mukesh Ambani’s Reliance Industries had announced the acquisition of the Kishore Biyani-led Future Group for Rs 24,713 crore. Through the deal, Reliance will acquire Future Retail that owns BigBazaar that sells everything from groceries to cosmetics and apparel, and Future Lifestyle Fashions Ltd that operates fashion discount chain Brand Factory.
Experts point out that most non-compete agreements run for three-five years but financial compulsions may lead to a longer period, the report said.
“… We believe it is not possible for Biyani management to continue under Reliance,” said Ashish Kumar Singh, managing partner of Capstone Legal toldthe website.
A non-compete agreement is usually between an employer and the employee in which the latter promises not to enter into any kind of competition.
Founder of retail consultancy Wazir Advisors, Harminder Sahni, told the publication, “If it (non-compete clause) is for 15 years, then it means Biyani has no interest in doing retail business ever.
“If you read Biyani’s viewpoint over the last few years, he is always talking about brands and not retail. Fifteen years means that he would do something else in life. And for how long can one keep doing retailing? Kishore Biyani is not just a retailer – he is a businessman.”
The acquisition is set to bolster Reliance’s presence, adding another 1,800 stores to its retail portfolio, which already covers some 11,000 stores in more than 6,700 Indian towns and cities, including wholesale operations.
(With agency inputs)