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More Retail
Legal head Gopal Naik is the most senior lawyer in the department. Sumeet Mhatre, in-charge of corporate, supervises the acquisitions of property and vendor contracts. Vinod Saraf, head – compliance and in-charge of south region, manages the entire compliance and South region. In-charge of North and East regions, Navneet Mathur is managing compliance and handles legal issues in North & East regions.
Firstly, the change of control transaction. In early 2018, More Retail, then known as Aditya Birla Retail Ltd. (ABRL) part of the Aditya Birla Group, was in negotiation to be acquired jointly by Samara Capital and a multi-national company in a 100% share acquisition deal. For the due diligence process ABRL had to provide detailed information, status and data along with supporting documents for all the 22 + licenses for each of the 630 locations where ABRL was operating, 2,000 vendors, an IPR portfolio of around 1,700 marks, copyrights and designs. In view of the retail industry’s unique statutory requirements there was significant focus on compliance, regulatory norms and on on-going litigation cases. The entire team was deeply involved in the transaction and due diligence process and it was completed in record time, without any flaw or bottleneck. The share purchase agreement was finally executed in September, 2018 and after approval of CCI, the transaction was formalised on 28th March, 2019.
Secondly, successfully obtaining an amendment application passed in an arbitration matter. The arbitration award was passed against More Retail Ltd. (MRL) in 2010 with orders to pay around Rs.25 crores plus interest to the opposite party. There were patent flaws in the award and against this, applications under section 34 of the Arbitration Act was filed by MRL. While these applications were pending, MRL filed a RTI application and the team found irregularities and MRL immediately filed an amendment application. The team briefed and engaged with the senior counsel constantly. Despite the application for amendment being strongly opposed by the opposite side stating non-relevance of documents, the late stage and that the grounds had not been taken under the section 34 application, after intense arguments and counter arguments the District Court was pleased to allow the amendment application in 2016. The other side filed Appeal in the H.C but was forced to withdraw its appeal in 2018 due to the strong case put up by MRL team. This has strengthened our case for favourable final orders and virtually turned the tables in a nearly lost case. Thirdly, the successful closure of 10 criminal cases with potential threat to personal liberty under the Prevention of Food Adulteration Act (PFA). During 2007-08, MRL was dependent on sales and revenue on third party food products. Under the then prevalent PFA, every case was pushed to criminal prosecution and so personal liberty of the nominee-employee was at stake. Even in 2017-18, cases initiated in 2008-09 were pending. In many cases the nominees were not traceable and relevant documents were difficult to retrieve. When PFA was repealed by FSSA in 2006, making use of the Supreme Court case law of Nemi Chand, MRL spearheaded industry representation for adjudication of pending PFA cases. FSSA directed the governments on the basis of our representations, which resulted in the successful closure of 10 pending PFA matters leading to the acquittal of 20 employees whose personal liberty was at stake.
Lastly, favourable awards in critical arbitration matters. An award was passed in favour of the company in two critical matters in the last two years. In both matters, the team drafted the pleadings, briefed the advocates and engaged with advocates at every stage from cross examination to argument stage. Both matters involved interpretation of commercial contractual terms and interpretation of law and due to the well-constructed and unambiguous drafting of the contractual agreement which was done in-house by the team, the company was successful in getting award passed in its favour.
Several states like Delhi, Karnataka have increased the minimum wages exorbitantly in the recent past. In the state of Karnataka, vide latest notification, the minimum wages have been increased substantially with a retrospective effect. MRL has a workforce of 14,000 employees out of which nearly 13,000 come under MW Act. Out of these 13,000, the majority are employed in stores in Karnataka since we have the highest store count in that state. This retrospective increase has had a major financial impact on the company. The government has passed the Plastic Waste Management Act, 2016 and Amendment act in 2018 and being a company which believes in environmental sustainability, the company is fully aligned with the objectives of the act. However, currently there are no alternatives available to sustain the ban or available alternatives are exorbitantly costly which acts as a hindrance to its adoption by the consumers. MRL’s R&D team is working on cost effective alternatives but in the meantime, MRL has adopted the costly alternative at its stores which has impacted it financially. Since retail companies already operate on wafer-thin margins the adoption of this costly alternative has further eroded its margins.
The main focus of the company is customer satisfaction while achieving the targeted network expansion and using innovation to stay ahead of the competition. The company has mandated that these objectives should be achieved with existing resources and for this team has aligned itself to work in a seamless manner with other teams. To achieve this, legal has been empowered to take decisions at all levels. The team has also devised a structured calendar for the year, for store visits by legal team members to understand the customer experience at the store and to ensure compliance standards. To be in step with the disruptive and competitive business environment, the team has devised innovative ways of working and empowered the team with independent decision making with accountability so that business requirements can be met with speed and accuracy.