Friday, November 20 2020

You came from Karachi but now you are in Mumbai, right? Now, one thing is clear, I do not care about which religion you follow—whether you are Hindu, Muslim or anything. But in Mumbai, do not use the name Karachi… I hate this name Karachi because that is a country of terrorists. Go to BMC and get it changed… It is my request and you will have to do it. We will give you time.

That’s Shiv Sena leader Nitin Nandgaonkar politely threatening the owner of Karachi Sweets in Mumbai's Bandra West. The clip of the encounter quickly went viral. Shiv Sena MP Sanjay Raut tweeted soon after: “Karachi bakery and karachi sweets have been in mumbai since last 60 years. They have nothing to do with Pakistan. It makes no sense to ask for changing their names now. Demand for changing their name is not Shiv Sena's official stance.” Hmm.

Big Story

So who really owns Future (of) Retail?

The TLDR: When Future Retail inked a Rs 250 billion deal to sell its chain of stores to Reliance, there was badhaiyan all around. That’s until Amazon came rushing in, yelling the equivalent of ‘yeh shaadi nahi ho sakti’. The reason: Future Retail had already hitched itself to Amazon—and was therefore cheating. 


Reliance’s response: Sorry, the pheras are already done. Future Retail: Please, we were just hookin’ up. Now the entire thing is in court—and the outcome may shape the future of foreign investment in India.


A timeline of the tamasha

Rishta #1: In August, 2019, Amazon invested Rs 1,431 crore to acquire a 49% stake in Future Coupons. The other 51% was held by Kishore Biyani. Now, just days before this transaction—on August 12—there was a less-publicised temple wedding between Future Coupons and Future Retail. This shaadi contract included the following clauses:


“Crucially, it said that retail assets of Future Retail could not be licensed, transferred or alienated without the approval of Future Coupons. In particular, it gave Future Coupons a veto over the sale of Future Retail’s assets to competitors, notably Reliance.”


Point to note here: Future Coupons only owns a 9.82% share in Future Retail. Therefore, Amazon owns 49% of Future Coupons stake.


Rishta #2: Almost exactly a year later, Kishore Biyani inked another deal—this time with Mukesh-bhai to sell Future Retail’s retail, wholesale, logistics and warehousing businesses. That includes 1,800 stores across 420 cities including Big Bazaar, Foodhall, FBB, eZone etc. The reason for this sudden sale: The company was on the verge of bankruptcy due to the pandemic. Market experts noted the sale will make Reliance the largest competitor by revenue in fashion, lifestyle and groceries. There was no mention as to what would happen to Amazon’s stake in the company.  


Cue, the big jhagda: Soon after, Amazon filed a complaint with the Singapore International Arbitration Centre (SIAC). The reason: the Future Coupons deal included the agreement to settle any future disputes via the SIAC. This is also standard practice in cases that involve overseas deals: “Indian companies and foreign companies operating in India often agree to settle disputes in Singapore because ‘it's a neutral jurisdiction with high integrity and international standards.’"


The SIAC issued an injunction ordering a temporary halt on Future Group's deal with Reliance. Armed with this injunction, Amazon then asked the Securities and Exchange Board of India (SEBI) and the Competition Commission of India not to approve the Reliance deal—which is required for it to become official—until the Singapore arbitration is settled. 


Future Retail’s response: The company took its case to the Delhi High Court asking it to stop Amazon from trying to stop its deal with Reliance. 


In essence, we now have two miyans, one biwi (or vice versa)—and a number of qazis who will determine which alliance is blessed by law.


The Amazon view…

Is straight-forward. According to CNN:


“Amazon argued [in front of SIAC] that the 2019 deal struck between it and the Future Group entity included a non-compete clause, a person familiar with Amazon's perspective told CNN Business. The clause listed 30 restricted parties with which Future Retail and Future Group could not do business, and Reliance was on that list.”


Translation: We had a list, and Mukesh-bhai was specifically on the list! Ergo, you cheated. 


More importantly, this: Amazon has made it very explicit that a failure to respect the SIAC arbitration will have broader consequences. According to Indian Express, in its letter to SEBI, the company said:


“[I]f the deal went ahead, it would show companies across the world that orders by reputed tribunals such as the Singapore International Arbitration Centre (SIAC) were not respected in India.”


The Future Retail view... 

Is a little more convoluted. It relies on a series of points—some of law, others of emotion. 


One: Amazon has no direct standing in any deal struck by Future Retail (FRL), as its lawyer argued in Delhi:


“... Amazon has no investment in FRL. An American company whose pro rata investment is less than 10% is telling me who I should invest in. Reliance wants to buy but I have to ask Big Brother sitting in America?”


Two: Blocking the sale will result in financial catastrophe, as it told the SIAC: “If the disputed transaction falls through, FRL will go into liquidation. That will mean that the livelihoods of more than 29,000 employees of FRL will be lost.” Now, SIAC didn’t buy this argument, saying “economic hardship alone is not a legal ground for disregarding legal obligations.” But the Delhi High Court may be more sympathetic.


Three: The SIAC’s decisions are not binding on any Indian institution—be it the court or SEBI: 


“The first thing I want to point out is the legal status of emergency arbitrator is an issue in the suit. The emergency arbitrator’s award is a nullity… They show the award to SEBI and then they reproduce certain findings… They say it’s binding and it will bind you as a regulator... It is a complete falsification of the legal position."


Point to note: This is sort of true. The SIAC injunction cannot be enforced in India without being ratified by an Indian court. According to experts, if either SEBI or the courts don’t stop the Reliance sale, Amazon will only get monetary compensation for damages if they win the SIAC arbitration. But Indian courts have usually held up such injunctions in the past. But this time, it’s Reliance so 🤷🏽‍♀️.


Plot mein twist

Filings in the Delhi court have uncovered a potential achilles heel for Amazon. And it has to do with a tiny clause buried deep in the laws that govern foreign investment. It says:


“Retail trading, in any form, by means of e-commerce, would not be permissible, for companies with FDI (foreign direct investment), engaged in the activity of multi-brand retail trading.”


In essence, it bans any foreign e-commerce player from investing in India’s brick-and-mortar multi-brand retail company—example, Future Retail. But very importantly, it does not apply to Future Coupon—which is a wholesale outfit that also distributes gift and loyalty cards. 


Why this matters 

  • Amazon wants it both ways: It claims it has the power to block the deal with Reliance. But it insists that it is not in violation of the above law because it only holds “protective” or “passive rights” in Future Retail, which do not amount to ''control.”
  • Amazon could never have increased its stake in Future Retail—or bailed it out when it was floundering due to a lack of cash. Ergo: It is using its deal with Future Coupons just to deny the retail arm the only possible lifeline.
  • And some insist that this was the plan all along: “a two-step duck-and-weave of Indian regulations” to control Future Retail—and keep it out of Reliance’s grasp.


The bottomline: There are no good guys in this fight between two fabulously wealthy companies with often dubious business practices. One market expert points out:


"If someone backs down, it will give the impression that one has lost and the other has won, when the fight has just started… It's not like without it you can't have your ambitions, if you don't have Future.” 


And losing this fight will do little to dent either Reliance or Amazon. But Future may well be trampled underfoot—which ought to be a good learning to the rest of us.


The reading list:

With this story, a lot depends on which news site you read. You can get the clearest articulation of Reliance/Future’s view across Network 18 outlets—and of them Money Control and Firstpost are the most persuasive. CNN’s story is based almost exclusively on Amazon sources. Indian Express has a more detailed and nerdier explainer. Quartz offers a big picture view of the war between Reliance and Amazon. The Federal explains why Future Group is the biggest loser in this mega-brawl.


Sanity Break #1

Extending the Diwali feels: Police officers getting their festive groove on at the Wellington Police Academy in New Zealand. We ❤️❤️❤️.

Headlines that matter

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The great pandemic: A quick update

  • A new study in Pune shows that areas with the highest number of previous infections have the fewest number of new cases. What it means: They may be attaining some level of ‘herd immunity’. The Telegraph explains.
  • The latest data from late-stage trials shows that the Oxford vaccine triggered a strong immune response in folks in their 60s and 70s—i.e. those most vulnerable to infection. And that’s very good news for India since the vaccine is being manufactured by the Serum Institute of India—which has also announced the likely price of the vaccine: Rs 500-600 per dose for individual consumers. The government will pay half that price.
  • South Australia has gone into one of the most stringent lockdowns in the world after 23 news cases were detected. Local officials say they have detected a “particularly sneaky” strain that shows few symptoms but spreads far more rapidly. Many experts think the claim is “rubbish.”
  • BBC documentary shocker: At the start of the pandemic, the UK’s top scientific advisors were scouring Wikipedia for data—and didn’t have a single virus expert among them.
  • Nearly 1 million people in China have received Sinopharm’s vaccine—which is authorised for emergency use even though there is no trial data that confirms its effectiveness.


In related news: China has a mysterious new travel policy. Until now, international arrivals had to take a Covid test at the airport and do a mandatory 14-day quarantine. Now, there’s an added requirement: a negative IgM antibody test result:


“These tests detect disease-fighting molecules called antibodies, in particular one called immunoglobulin M, or IgM, which is usually the first type of antibody roused against infectious invaders. IgM’s presence is ephemeral; eventually, two other types of antibodies that are much longer-lived, called IgG and IgA, take over.”


The problem: our bodies can take up to two weeks to produce these antibodies—and we may be infected and infectious way before then. Some US experts think this is useless “security theater.” Others argue that maybe China knows something about the virus the rest of us don’t. Forbes has that theory.


And the Booker goes to…

Scottish-American Douglas Stuart who won the top honour for his debut novel ‘Shuggie Bain’—“a story based on his own life that follows a boy growing up in poverty in 1980s Glasgow with a mother who is battling addiction.” The Guardian has more. Indians are sad because he beat out Avni Doshi whose ‘Burnt Sugar’ was on the shortlist.


Finally, some relief for manual scavengers

For years, newspapers have been filled with horror stories of the working conditions of manual scavengers—who often pay with their life for the ‘honour’ of cleaning our sewers. The government is finally mandating the use of machines to clean sewers and septic tanks—and setting up a 24X7 hotline to report violations. The aim: to eliminate the use of human labour by April, 2021. (Indian Express)


Vatican is mad at Instagram

Some eagle-eyed users recently noticed that the Pope’s official account ‘liked’ a particularly raunchy photo of a Brazilian model. The screenshots went viral, and the post was quickly ‘unliked’. But now the Vatican is demanding answers, insisting that “we can exclude that the ‘like’ came from the Holy See.” To be fair: Pope Francis is no Donald Trump and rarely manages his own social media accounts. Our guess: a horny employee who forgot to switch from the official handle to their personal account. (The Guardian)


Buzzfeed is buying Huffington Post

The company is presently owned by Verizon Media and will now be owned by Buzzfeed—whose Chief Executive Officer Jonah Peretti was also co-founder of Huffington Post back when it started. Point to note: This raises questions about the future of Huffington Post India. New rules cap foreign investment in Indian digital media at 26%—and require that the CEO be an Indian citizen (explained here). But it isn’t clear whether this will apply to HuffPo’s India operations. TechCrunch has more on the US deal.


Wonder Woman heads to HBO Max

In an astonishing decision, the next, highly anticipated installment of the superhero franchise will hit theatres on December 16—and then stream on HBO Max. Why this is surprising: “Wonder Woman 1984” was expected to be one of the biggest films of 2020 and had the potential to surpass $1 billion in ticket sales. So streaming it on a platform for no extra cost is kinda a big deal. Many expected that the movie—which cost $200 million to make—would be pushed to 2021 like other big releases. Reminder: We don’t know when we will get to see the movie, as we do not have HBO Max in India. Also: there have been no big releases in theatres as yet. (Variety)

Madagascar is falling apart

A new study shows that Madagascar—an island nation off the coast of Africa (and sadly made most famous by Disney)—is breaking up into smaller bits. And this is part of a bigger process: The entire continent of Africa is splitting into two, which will likely create a new ocean. The good news: It will take another ten million years. Neat fact to know: Madagascar used to be part of the Indian subcontinent until it split off and drifted away 88 million years ago. (Quartz)

Our craziest dreams, explained

When we dream, we're sorting through our experiences of the last day or so—saving the important stuff as memories, and discarding the rest. But why are some of our dreams so strange? A new theory offers a very nerdy AI-driven explanation. 


In machine learning, programmers deliberately feed an algorithm all sorts of unrelated data—think of it as ‘noise’—so it learns to focus on genuinely relevant information. And the wacky parts of our dreams serve the same function:


“Put plainly, our dreams are just realistic enough to engross us and carry us along, but are just different enough from our experiences—our ‘training set’—to effectively serve as noise.” 

And that “off-pattern nonsense” forces our brains to see the forest and not the trees in our daily experiences. So just remember that the next time you’re soaring like an eagle in your dreams. (Big Think)

Wanna stay in SRK’s home?

Well, you can if you are one of two lucky winners of Airbnb’s ‘Home with Open Arms’ contest. No, not the fabulous Mannat in Mumbai, but his Delhi bungalow which has been decorated by wife Gauri. What you have to do to make this little dream true: share what an “open arms welcome” means to you by November 30 on Airbnb’s website. Good luck with that! Remember what is at stake


“During their stay, the guests will experience a curated itinerary developed by Gauri, enjoy a meal, including Shah Rukh’s favourite dishes, watch the superstar’s favourite films and his biggest hits as well as receive personalised souvenirs from the family.”


An early Christmas tale

The giant tree at Rockefeller Center in New York city is an iconic Christmas emblem. But this year’s edition is looking a little, er, lame—and getting a lot of flak for it. But turns out it was hiding a tiny miracle. To be exact: a tiny saw-whet owl that clung to its branches for three days over 170 miles. According to one of his rescuers, "It's amazing he didn't get crushed." He has since been discovered and moved to a wildlife center to recover. Oh, he also has a name now: Rockefeller, of course.


Sanity Break #2
You may or may not be a fan of Van Halen but this musical tribute to Eddie Van Halen by his son, Wolfgang, will surely make you go awww… Yes, bad boy guitarists can be awesome and greatly loved dads.
Weekend Advisory

So you wanna listen to something...

This week, we have something a little different for you… in case you want to change up that Netflix and chill routine. Our newest splainer team member, Disha Verma, offers a list of her fave podcasts below:

  • Off Menu: Comedians Ed Gamble and James Acaster invite celebrity guests to design their own five-course “dream menu”—which quickly escalates into insane food stories and half-hour rants on why Biryani is the greatest food. (Kumail Nanjiani, we hear you)
  • Incarnations: India in 50 Lives: Sunil Khilnani takes us through the history of India through the lives of fifty influential figures, old and young, in fifty high-impact episodes.
  • No Such Thing As A Fish: From the British quiz-show ‘Quite Interesting’. QI researchers sit down to dissect four wacky but true facts they stumbled upon that week—and the result has us ROFLing!
  • Philosophize This!: If you're interested in philosophy but don’t have the time to read fat, drab books, this show is for you. Stephen West breaks down complicated philosophy theories and schools, one philosopher at a time, to give you clean, crisp crash courses.
  • My Dad Wrote A Porno: Jamie Morton is an ordinary British man… except his dad wrote a porno and he wants to read it out to us. This show will make you laugh and cringe like no other on this list!
  • You’re Dead To Me: Hated history in school? It’s probably because it wasn’t taught this way. Sit back and let comedians explain to you everything from the Haitian Revolution to the history of chocolate in this funny but highly informative BBC podcast.
  • My Favorite Murder: Everyone loves a good true crime podcast, but imagine one that also makes you laugh. “Stay Sexy and Don't Get Murdered”!
  • Citations Needed: A topical talk-show that explores policies, events and ‘hot-takes’ with facts and nuance. All without being boring. We loved their (refreshingly unbiased) coverage of the US Election.
  • Bad & Bollywood: A hilarious desi podcast where two friends dissect long-forgotten bollywood movies that are so bad they’re almost… good? The likes of Masand and Chopra are outdated—this is where millennials get their movie reviews from.
  • BBC Earth: This slow-paced, soothing, high-production audio version of NatGeo is the perfect podcast to unwind on a weekend to.
  • The Invisible College: Writers’ block? Let legendary playwrights and novelists help you break it. Each episode features speeches and creative writing tips from the likes of Ted Hughes, WB Yeats and Allen Ginsberg. Surreal!
  • Dan Carlin’s Hardcore History: Have time to spare and wanna learn all of history? Trust Dan Carlin, internet’s favourite historian, to explain every war and uprising in world history with painstaking patience and detail. Note: some episodes run upto 7 hours long!
  • The Overthink Tank: Beloved Indian comedians overthink silly stuff—so you don’t have to. Yes, we love structured debates on why he didn’t text back. 


A list of good reads

  • Our fave read on this list: The Atlantic on friends who “borrow” but never return—and why people pull this shit all the time.
  • Fariha Róisín in The Guardian writes about the burden of family secrets and who gets to tell the story about a terrible act of violence.
  • The Smithsonian rounds up the nine weirdest animal penises in the world. Don’t worry. There are no photos of these wonders, but plenty of amusing prose.
  • We greatly enjoyed Akriti Rana’s apt comparison of iPhone design to a soan papdi dabba.
  • Related read: If you’ve ever struggled to figure out how to use your iPhone’s Bedtime Mode, Mashable has the perfect guide.
  • Economist explains why self-help books are so popular in China—and the reasons hold just as true of India.
  • Huffington Post has a handy list of 14 great children’s books that can help kids navigate an increasingly polarised and hate-filled world.
  • Yeast infection or UTI? Insider offers a useful guide to self-diagnosis.
  • Is it time for Twitter to die? Gizmodo certainly thinks so, and explains why Trump’s exit will seal its fate.
Feel good place

One: What not to do when caught stealing sugarcane…


Two: Communal bath.


Three: Every woman knows exactly what happened here… lol!


Four: When you need to hitch a ride...


Five: Bill Gates’ real super power...


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