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After Future Retail, another Kishore Biyani company Future Enterprise has been admitted to insolvency resolution, requiring the firm to be auctioned to recover unpaid dues.
In a regulatory filing, Future Retail said the Mumbai bench of the National Company Law Tribunal on March 7 “ordered the commencement of corporate insolvency resolution process (CIRP)”.
The NCLT appointed a resolution professional to manage the affairs of the company till it is sold to a successful bidder.
With the commencement of CIRP, the management of the company now vest with the resolution professional and the powers of the board of directors stand suspended, the filing said.
The insolvency order was passed on a petition of Foresight Innovations Pvt. Ltd. – a New Delhi-based supplier, which claimed that ₹1.58 crore of payment was defaulted by Future Enterprises.
Another operational creditor, Retail Detailz India had also filed a similar petition claiming a default of ₹4.02 crore.
Section 9 of the IBC gives power to operational creditors of a company to initiate a corporate insolvency resolution process in case of a default.
Operational creditors are those whose debt is owed on account of dues arising out of business transactions. This mostly includes claims for the delivery of goods or services and employment.
Future Enterprises was part of the 19 group companies operating in retail, wholesale, logistics and warehousing segments, which were supposed to be transferred to Reliance Retail as part of a ₹24,713-crore deal announced in August 2020.
The deal was called off by billionaire Mukesh Ambani-led Reliance Industries Ltd. in April last year.
It had recently committed several defaults on payment of interest on its several non-convertible debentures.
The NCLT has already initiated insolvency proceedings against Future Group’s flagship firm Future Retail Ltd. Financial creditors have claimed ₹21,057 crore from Future Retail while operational creditors have claimed another ₹265 crore.
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