Reliance-Future organization deal pushes Kishore Biyani, kin out of retail area for 15 years: Report

Under a non-compete clause of the Reliance-Future Group deal, Kishore Biyani and his family are banned from re-coming into the retail area for the following 15 years, reports Economic Times quoting sources in the know about the settlement’s specifics.

Sources instructed the publication that as according to the deal, neither Biyani nor his instant family participants can function in any retail segment. DH couldn’t independently confirm this document.

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“There is, however, an exception, of home retailing, wherein Reliance has no presence so far. The deal is relevant for all present retail groups both online and offline,” one of the sources informed the publication.

Last week, billionaire Mukesh Ambani’s Reliance Industries had introduced the purchase of the Kishore Biyani-led Future Group for Rs 24,713 crore. Through the deal, Reliance will collect 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 factor out that maximum non-compete agreements run for three-5 years however monetary compulsions may cause an extended period, the report stated.

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“We believe it is not viable for Biyani management to hold under Reliance,” stated Ashish Kumar Singh, managing associate of Capstone Legal informed the website.

A non-compete settlement is usually between an organisation and the worker in which the latter promises not to go into into any sort of competition.

Founder of retail consultancy Wazir Advisors, Harminder Sahni, informed the publication, “If it (non-compete clause) is for 15 years, then it means Biyani has no interest in doing retail commercial enterprise ever.

“If you read Biyani’s viewpoint over the previous couple of years, he’s always talking about brands and not retail. Fifteen years means that he might do some thing else in life. And for how long can one hold doing retailing? Kishore Biyani isn’t always just a retailer – he’s a businessman.”

The acquisition is set to strengthen Reliance’s presence, including another 1,800 shops to its retail portfolio, which already covers a few 11,000 shops in more than 6,700 Indian cities and cities, inclusive of wholesale operations.