The Bank of India has filed a petition in the National Company Law Tribunal (NCLT) to institute bankruptcy proceedings against indebted Future Retail Ltd. posed.
Earlier this month, Future Retail Ltd. (FRL) has reported a £5,322.32 billion default to its lenders amid ongoing litigation with major e-commerce giant Amazon and other related issues.
“The Bank of India (BoI) has served a Pre-Notification of Filing an Application under Section 7 of the Insolvency and Bankruptcy Act 2016 against the Company for failure to pay monies due under the Framework Agreement entered into between the Company and Bank of India,” FRL said in an application for admission.
Future Group said it had received a copy of the petition and was “in the process of seeking legal advice”.
BoI, the lead banker to FRL’s syndicate of lenders, claimed responsibility for FRL’s assets through a public notice in newspapers last month, warning the public not to deal with assets of Kishore Biyani-led Future Group firm.
Several Future Group companies, including FRL, had reached arrangements with their respective lenders under the RBI circular dated August 6, 2020 announcing a resolution framework for COVID-related stress.
FRL is part of the £24,713 million deal announced by Future Group in August 2020, under which 19 companies active in the retail, wholesale, logistics and warehousing segments will acquire Reliance Retail Ventures Ltd. (RRVL) are to be sold.
All 19 companies would be consolidated into one entity – Future Enterprises Ltd – and then transferred to RRVL as part of the proposed deal.
Future group companies will hold meetings with their respective shareholders and creditors between April 20 and 23, 2022 to obtain their approval for the £24,713 billion deal.
The deal is being challenged by Amazon and is the subject of litigation at various forums, including the Supreme Court, the Delhi High Court and the Singapore International Arbitration Centre.
Earlier this week, Amazon FRL warned it would not hold meetings of its shareholders and creditors to approve the sale of its retail assets to Reliance Retail.
In a 16-page letter to Kishore Biyani and other promoters on April 12, the US e-commerce giant said such meetings are illegal and not only violate agreements made in 2019 when Amazon invested in FRL’s promoter company , but also violated an injunction by a Singapore arbitration tribunal in the sale of retail properties to Reliance.